H.L.C. 

108TH CONGRESS REPT. 108–262 " HOUSE OF REPRESENTATIVES ! 1st Session Part 1

COMPACT OF FREE ASSOCIATION AMENDMENTS ACT OF 

2003

SEPTEMBER 3, 2003.—Ordered to be printed 

Mr. HYDE, from the Committee on International Relations, 

submitted the following 

R E P O R T 

together with 

ADDITIONAL VIEWS 

[To accompany H.J. Res. 63] 

[Including cost estimate of the Congressional Budget Office]

The Committee on International Relations, to whom was referred the joint resolution (H.J. Res. 63) to approve the ‘‘Compact 

of Free Association, as amended between the Government of the 

United States of America and the Government of the Federated 

States of Micronesia’’, and the ‘‘Compact of Free Association, as 

amended between the Government of the United States of America 

and the Government of the Republic of the Marshall Islands’’, and 

otherwise to amend Public Law 99–239, and to appropriate for the 

purposes of amended Public Law 99–239 for fiscal years ending on 

or before September 30, 2023, and for other purposes, having considered the same, reports favorably thereon with an amendment 

and recommends that the joint resolution as amended do pass.

TABLE OF CONTENTS 

Page 

The Amendment ...................................................................................................... 2

Purpose and Summary ............................................................................................ 72

Background and Need for the Legislation ............................................................. 73

Hearings ................................................................................................................... 75

Committee Consideration ........................................................................................ 76

Committee Oversight Findings ............................................................................... 76

New Budget Authority and Tax Expenditures ...................................................... 76

2

H.L.C. 

Congressional Budget Office Cost Estimate .......................................................... 76

Performance Goals and Objectives ......................................................................... 80

Constitutional Authority Statement ...................................................................... 80

Section-by-Section Analysis .................................................................................... 80

Section-by-Section Summary of the Amended Compact of Free Association 

with the Federated States of Micronesia [Sec. 201(a) of H.J. Res. 63] ............ 86

Section-by-Section Summary of the Amended Compact of Free Association 

with the Republic of the Marshall Islands [Sec. 201(b) of H.J. Res. 63] ......... 97

New Advisory Committees ...................................................................................... 108

Congressional Accountability Act ........................................................................... 108

Federal Mandates .................................................................................................... 108

Changes in Existing Law Made by the Bill, as Reported ..................................... 108

Additional Views of Representative Nick Smith ................................................... 110

THE AMENDMENT

The amendment is as follows: 

Strike all after the resolving clause and insert the following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This joint resolution, together with the Table of Contents in 

subsection (b) of this section, may be cited as the ‘‘Compact of Free Association 

Amendments Act of 2003’’. 

(b) TABLE OF CONTENTS.—The table of contents for this joint resolution is as 

follows:

TITLE I—APPROVAL OF U.S.-FSM COMPACT AND U.S.-RMI COMPACT; INTERPRETATION OF, AND 

UNITED STATES POLICIES REGARDING, U.S.-FSM COMPACT AND U.S.-RMI COMPACT; SUPPLEMENTAL PROVISIONS 

Sec. 101. Approval of U.S.-FSM Compact of Free Association and U.S.-RMI Compact of Free Association. 

(a) Federated States of Micronesia. 

(b) Republic of the Marshall Islands. 

(c) References to the Compact, the U.S.-FSM Compact and the U.S.-RMI Compact. 

(d) Amendment, Change, or Termination in the U.S.-FSM Compact, the U.S.-RMI Compact and 

Certain Agreements. 

(e) Subsidiary Agreement Deemed Bilateral. 

(f) Entry Into Force of Future Amendments to Subsidiary Agreements. 

Sec. 102. Agreements With Federated States of Micronesia. 

(a) Law Enforcement Assistance. 

(b) Agreement on Audits. 

Sec. 103. Agreements With and Other Provisions Related to the Republic of the Marshall Islands. 

(a) Law Enforcement Assistance. 

(b) EJIT. 

(c) Section 177 Agreement. 

(d) Nuclear Test Effects. 

(e) Espousal Provisions. 

(f) DOE Radiological Health Care Program; USDA Agricultural and Food Programs. 

(g) Rongelap. 

(h) Four Atoll Health Care Program. 

(i) Enjebi Community Trust Fund. 

(j) Bikini Atoll Cleanup. 

(k) Agreement on Audits. 

Sec. 104. Interpretation of and United States Policy Regarding U.S.-FSM Compact and U.S.-RMI Compact. 

(a) Human Rights. 

(b) Immigration and Passport Security. 

(c) Nonalienation of Lands. 

(d) Nuclear Waste Disposal. 

(e) Effect of U.S.-FSM Compact and U.S.-RMI Compact on U.S. Areas; Related Authorization 

and Continuing Appropriation. 

(f) Foreign Loans. 

Sec. 105. Supplemental Provisions. 

(a) Domestic Program Requirements. 

(b) Relations With the Federated States of Micronesia and the Republic of the Marshall Islands. 

(c) Continuing Trust Territory Authorization. 

(d) Survivability. 

(e) Noncompliance Sanctions. 

(f) Continuing Programs and Laws. 

(g) College of Micronesia. 

(h) Trust Territory Debts to U.S. Federal Agencies. 

(i) Use of DOD Medical Facilities. 

(j) Technical Assistance. 

(k) Prior Service Benefits Program. 

(l) Indefinite Land Use Payments. 

(m) Communicable Disease Control Program. 

(n) User Fees. 

(o) Treatment of Judgments of Courts of the Federated States of Micronesia, the Republic of the 

Marshall Islands, and the Republic of Palau. 

Sec. 106. Construction Contract Assistance. 

(a) Assistance to U.S. Firms. 

(b) Authorization of Appropriations. 

Sec. 107. Limitations. 

3

H.L.C. 

Prohibition. 

Sec. 108. Compensatory Adjustments. 

(a) Additional Programs and Services. 

(b) Further Amounts. 

Sec. 109. Authorization and Continuing Appropriation. 

Sec. 110. Payment of Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and 

the Republic of Palau Employed by the Government of the United States in the Continental United 

States.

TITLE II—COMPACTS OF FREE ASSOCIATION WITH THE FEDERATED STATES OF MICRONESIA AND 

THE REPUBLIC OF THE MARSHALL ISLANDS 

Sec. 201. Compacts of Free Association, as Amended. 

(a) Compact of Free Association as amended between the Government of the United States of 

America and the Government of the Federated States of Micronesia. 

Title One—Governmental Relations 

Article I—Self-Government. 

Article II—Foreign Affairs. 

Article III—Communications. 

Article IV—Immigration. 

Article V—Representation. 

Article VI—Environmental Protection. 

Article VII—General Legal Provisions. 

Title Two—Economic Relations

Article I—Grant Assistance. 

Article II—Services and Program Assistance. 

Article III—Administrative Provisions. 

Article IV—Trade. 

Article V—Finance and Taxation. 

Title Three—Security and Defense Relations 

Article I—Authority and Responsibility. 

Article II—Defense Facilities and Operating Rights. 

Article III—Defense Treaties and International Security Agreements. 

Article IV—Service in Armed Forces of the United States. 

Article V—General Provisions. 

Title Four—General Provisions 

Article I—Approval and Effective Date. 

Article II—Conference and Dispute Resolution. 

Article III—Amendment. 

Article IV—Termination. 

Article V—Survivability. 

Article VI—Definition of Terms. 

Article VII—Concluding Provisions. 

(b) Compact of Free Association as amended between the Government of the United States of 

America and the Government of the Republic of the Marshall Islands. 

Title One—Governmental Relations 

Article I—Self-Government. 

Article II—Foreign Affairs. 

Article III—Communications. 

Article IV—Immigration. 

Article V—Representation. 

Article VI—Environmental Protection. 

Article VII—General Legal Provisions. 

Title Two—Economic Relations 

Article I—Grant Assistance. 

Article II—Services and Program Assistance. 

Article III—Administrative Provisions. 

Article IV—Trade. 

Article V—Finance and Taxation. 

Title Three—Security and Defense Relations 

Article I—Authority and Responsibility. 

Article II—Defense Facilities and Operating Rights. 

Article III—Defense Treaties and International Security Agreements. 

Article IV—Service in Armed Forces of the United States. 

Article V—General Provisions. 

Title Four—General Provisions 

Article I—Approval and Effective Date. 

Article II—Conference and Dispute Resolution. 

Article III—Amendment. 

Article IV—Termination. 

Article V—Survivability. 

Article VI—Definition of Terms. 

Article VII—Concluding Provisions.

4

TITLE I—APPROVAL OF U.S.-FSM COMPACT 

AND U.S.-RMI COMPACT; INTERPRETATION 

OF, AND U.S. POLICIES REGARDING, U.S.-FSM 

COMPACT AND U.S.-RMI COMPACT; SUPPLEMENTAL PROVISIONS 

SEC. 101. APPROVAL OF U.S.-FSM COMPACT OF FREE ASSOCIATION AND THE U.S.-RMI COMPACT OF FREE ASSOCIATION; REFERENCES TO SUBSIDIARY AGREEMENTS OR SEPARATE AGREEMENTS. 

(a) FEDERATED STATES OF MICRONESIA.—The Compact of Free Association, as 

amended with respect to the Federated States of Micronesia and signed by the 

United States and the Government of the Federated States of Micronesia and set 

forth in Title II (section 201(a)) of this joint resolution, is hereby approved, and Congress hereby consents to the subsidiary agreements and amended subsidiary agreements listed in section 462 of the U.S.-FSM Compact. Subject to the provisions of 

this joint resolution, the President is authorized to agree, in accordance with section 

411 of the U.S.-FSM Compact, to an effective date for and thereafter to implement 

such U.S.-FSM Compact. 

(b) REPUBLIC OF THE MARSHALL ISLANDS.—The Compact of Free Association, as 

amended with respect to the Republic of the Marshall Islands and signed by the 

United States and the Government of the Republic of the Marshall Islands and set 

forth in Title II (section 201(b)) of this joint resolution, is hereby approved, and Congress hereby consents to the subsidiary agreements and amended subsidiary agreements listed in section 462 of the U.S.-RMI Compact. Subject to the provisions of 

this joint resolution, the President is authorized to agree, in accordance with section 

411 of the U.S.-RMI Compact, to an effective date for and thereafter to implement 

such U.S.-RMI Compact. 

(c) REFERENCES TO THE COMPACT, THE U.S.-FSM COMPACT, AND THE U.S.-RMI 

COMPACT; REFERENCES TO SUBSIDIARY AGREEMENTS OR SEPARATE AGREEMENTS.— (1) Any reference in this joint resolution (except references in Title II) to 

‘‘the Compact’’ shall be treated as a reference to the Compact of Free Association set forth in title II of Public Law 99–239, January 14, 1986, 99 Stat. 1770. 

Any reference in this joint resolution to the ‘‘U.S.-FSM Compact’’ shall be treated as a reference to the Compact of Free Association, as amended between the 

Government of the United States of America and the Government of the Federated States of Micronesia and set forth in Title II (section 201(a)) of this joint 

resolution. Any reference in this joint resolution to the ‘‘U.S.-RMI Compact’’ 

shall be treated as a reference to the Compact of Free Association, as amended 

between the Government of the United States of America and the Government 

of the Republic of the Marshall Islands and set forth in Title II (section 201(b)) 

of this joint resolution. 

(2) Any reference to the term ‘‘subsidiary agreements’’ or ‘‘separate agreements’’ in this joint resolution shall be treated as a reference to agreements listed in section 462 of the U.S.-FSM Compact and the U.S.-RMI Compact, and any 

other agreements that the United States may from time to time enter into with 

either the government of the Federated States of Micronesia or the government 

of the Republic of the Marshall Islands, or with both such governments in accordance with the provisions of the U.S.-FSM Compact and the U.S.-RMI Compact. 

(d) AMENDMENT, CHANGE, OR TERMINATION IN THE U.S.-FSM COMPACT AND

U.S.-RMI COMPACT AND CERTAIN AGREEMENTS.—

(1) Any amendment, change, or termination by mutual agreement or by 

unilateral action of the Government of the United States of all or any part of 

the U.S.-FSM Compact or U.S.-RMI Compact shall not enter into force until 

after Congress has incorporated it in an Act of Congress. 

(2) The provisions of paragraph (1) shall apply—

(A) to all actions of the Government of the United States under the 

U.S.-FSM Compact or U.S.-RMI Compact including, but not limited to, actions taken pursuant to sections 431, 441, or 442; 

(B) to any amendment, change, or termination in the Agreement Between the Government of the United States and the Government of the 

Federated States of Micronesia Regarding Friendship, Cooperation and Mutual Security Concluded Pursuant to Sections 321 and 323 of the Compact 

of Free Association referred to in section 462(a)(2) of the U.S.-FSM Compact 

and the Agreement Between the Government of the United States and the 

5

Government of the Marshall Islands Regarding Mutual Security Concluded 

Pursuant to Sections 321 and 323 of the Compact of Free Association referred to in section 462(a)(5) of the U.S.-RMI Compact; 

(C) to any amendment, change, or termination of the agreements concluded pursuant to Compact section 177, and section 215(a) of the U.S.-

FSM Compact and section 216(a) of the U.S.-RMI Compact, the terms of 

which are incorporated by reference into the U.S.-FSM Compact and the 

U.S.-RMI Compact; and 

(D) to the following subsidiary agreements, or portions thereof: Articles 

III, IV and X of the agreement referred to in section 462(b)(6) of the U.S.-

RMI Compact: 

(i) Article III and IV of the agreement referred to in section 

462(b)(6) of the U.S.-FSM Compact. 

(ii) Articles VI, XV, and XVII of the agreement referred to in section 462(b)(7) of the U.S.-FSM Compact and U.S.-RMI Compact. 

(e) SUBSIDIARY AGREEMENTS DEEMED BILATERAL.—For purposes of implementation of the U.S.-FSM Compact and the U.S.-RMI Compact and this joint resolution, 

the Agreement Concluded Pursuant to Section 234 of the Compact of Free Association and referred to in section 462(a)(1) of the U.S.-FSM Compact and section 

462(a)(4) of the U.S.-RMI Compact shall be deemed to be a bilateral agreement between the United States and each other party to such subsidiary agreement. The 

consent or concurrence of any other party shall not be required for the effectiveness 

of any actions taken by the United States in conjunction with either the Federated 

States of Micronesia or the Republic of the Marshall Islands which are intended to 

affect the implementation, modification, suspension, or termination of such subsidiary agreement (or any provision thereof) as regards the mutual responsibilities 

of the United States and the party in conjunction with whom the actions are taken. 

(f) ENTRY INTO FORCE OF FUTURE AMENDMENTS TO SUBSIDIARY AGREEMENTS.—

No agreement between the United States and the government of either the Federated States of Micronesia or the Republic of the Marshall Islands which would 

amend, change, or terminate any subsidiary agreement or portion thereof, other 

than those set forth is subsection (d) of this section shall enter into force until after 

the President has transmitted such agreement to the President of the Senate and 

the Speaker of the House of Representatives together with an explanation of the 

agreement and the reasons therefor. In the case of the agreement referred to in section 462(b)(3) of the U.S.-FSM Compact and the U.S.-RMI Compact, such transmittal shall include a specific statement by the Secretary of Labor as to the necessity of such amendment, change, or termination, and the impact thereof. 

SEC. 102. AGREEMENTS WITH FEDERATED STATES OF MICRONESIA. 

(a) LAW ENFORCEMENT ASSISTANCE.—Pursuant to sections 222 and 224 of the 

U.S.-FSM Compact, the United States shall provide non-reimbursable technical and 

training assistance as appropriate, including training and equipment for postal inspection of illicit drugs and other contraband, to enable the Government of the Federated States of Micronesia to develop and adequately enforce laws of the Federated 

States of Micronesia and to cooperate with the United States in the enforcement of 

criminal laws of the United States. Funds appropriated pursuant to section 105(j) 

of this title may be used to reimburse State or local agencies providing such assistance. 

(b) AGREEMENT ON AUDITS.—The Comptroller General (and his duly authorized 

representatives) shall have the authorities necessary to carry out his responsibilities 

under section 232 of the U.S.-FSM Compact and the agreement referred to in section 462(b)(4) of the U.S.-FSM Compact, including the following authorities: 

(1) GENERAL AUTHORITY OF THE COMPTROLLER GENERAL TO AUDIT.—

(A) The Comptroller General of the United States (and his duly authorized representatives) shall have the authority to audit—

(i) all grants, program assistance, and other assistance provided to 

the Government of the Federated States of Micronesia under Articles 

I and II of Title Two of the U.S.-FSM Compact; and 

(ii) any other assistance provided by the Government of the United 

States to the Government of the Federated States of Micronesia. 

Such authority shall include authority for the Comptroller General to conduct or cause to be conducted any of the audits provided for in section 232 

of the U.S.-FSM Compact. The authority provided in this paragraph shall 

continue for at least three years after the last such grant has been made 

or assistance has been provided. 

(B) The Comptroller General (and his duly authorized representatives) 

shall also have authority to review any audit conducted by or on behalf of 

6

the Government of the United States. In this connection, the Comptroller 

General shall have access to such personnel and to such records, documents, working papers, automated data and files, and other information 

relevant to such review. 

(2) COMPTROLLER GENERAL ACCESS TO RECORDS.—

(A) In carrying out paragraph (1), the Comptroller General (and his 

duly authorized representatives) shall have such access to the personnel 

and (without cost) to records, documents, working papers, automated data 

and files, and other information relevant to such audits. The Comptroller 

General may duplicate any such records, documents, working papers, automated data and files, or other information relevant to such audits. 

(B) Such records, documents, working papers, automated data and files, 

and other information regarding each such grant or other assistance shall 

be maintained for at least three years after the date such grant or assistance was provided and in a manner that permits such grants, assistance, 

and payments to be accounted for distinct from any other funds of the Government of the Federated States of Micronesia. 

(3) STATUS OF COMPTROLLER GENERAL REPRESENTATIVES.—The Comptroller 

General and his duly authorized representatives shall be immune from civil and 

criminal process relating to words spoken or written and all acts performed by 

them in their official capacity and falling within their functions, except insofar 

as such immunity may be expressly waived by the Government of the United 

States. The Comptroller General and his duly authorized representatives shall 

not be liable to arrest or detention pending trial, except in the case of a grave 

crime and pursuant to a decision by a competent judicial authority, and such 

persons shall enjoy immunity from seizure of personal property, immigration restrictions, and laws relating to alien registration, fingerprinting, and the registration of foreign agents. Such persons shall enjoy the same taxation exemptions as are set forth in Article 34 of the Vienna Convention on Diplomatic Relations. The privileges, exemptions and immunities accorded under this paragraph are not for the personal benefit of the individuals concerned but are to 

safeguard the independent exercise of their official functions. Without prejudice 

to those privileges, exemptions and immunities, it is the duty of all such persons to respect the laws and regulations of the Government of the Federated 

States of Micronesia. 

(4) AUDITS DEFINED.—As used in this subsection, the term ‘‘audits’’ includes 

financial, program, and management audits, including determining—

(A) whether the Government of the Federated States of Micronesia has 

met the requirements set forth in the U.S.-FSM Compact, or any related 

agreement entered into under the U.S.-FSM Compact, regarding the purposes for which such grants and other assistance are to be used; and 

(B) the propriety of the financial transactions of the Government of the 

Federated States of Micronesia pursuant to such grants or assistance. 

(5) COOPERATION BY FEDERATED STATES OF MICRONESIA.—The Government 

of the Federated States of Micronesia will cooperate fully with the Comptroller 

General of the United States in the conduct of such audits as the Comptroller 

General determines necessary to enable the Comptroller General to fully discharge his responsibilities under this joint resolution. 

SEC. 103. AGREEMENTS WITH AND OTHER PROVISIONS RELATED TO THE REPUBLIC OF THE 

MARSHALL ISLANDS. 

(a) LAW ENFORCEMENT ASSISTANCE.—Pursuant to sections 222 and 224 of the 

U.S.-RMI Compact, the United States shall provide non-reimbursable technical and 

training assistance as appropriate, including training and equipment for postal inspection of illicit drugs and other contraband, to enable the Government of the Marshall Islands to develop and adequately enforce laws of the Marshall Islands and 

to cooperate with the United States in the enforcement of criminal laws of the 

United States. Funds appropriated pursuant to section 105(j) of this title may be 

used to reimburse State or local agencies providing such assistance. 

(b) EJIT.—

(1) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that the President of the United States shall negotiate with the 

Government of the Marshall Islands an agreement whereby, without prejudice 

as to any claims which have been or may be asserted by any party as to rightful 

title and ownership of any lands on Ejit, the Government of the Marshall Islands shall assure that lands on Ejit used as of January 1, 1985, by the people 

of Bikini, will continue to be available without charge for their use, until such 

time as Bikini is restored and inhabitable and the continued use of Ejit is no 

7

longer necessary, unless a Marshall Islands court of competent jurisdiction finally determines that there are legal impediments to continued use of Ejit by 

the people of Bikini. 

(2) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that if the impediments described in paragraph (1) do arise, the 

United States will cooperate with the Government of the Marshall Islands in 

assisting any person adversely affected by such judicial determination to remain 

on Ejit, or in locating suitable and acceptable alternative lands for such person’s 

use. (3) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that paragraph (1) shall not be applied in a manner which would 

prevent the Government of the Marshall Islands from acting in accordance with 

its constitutional processes to resolve title and ownership claims with respect 

to such lands or from taking substitute or additional measures to meet the 

needs of the people of Bikini with their democratically expressed consent and 

approval. 

(4) The United States and the Republic of the Marshall Islands entered into 

an agreement in furtherance of paragraphs (1) through (3) of this subsection on 

July 21, 1986. Nothing in this subsection creates any rights or obligations beyond those provided for in the original enacted version of Public Law 99–239. 

(c) SECTION 177 AGREEMENT.— (1) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that in furtherance of the purposes of Article I of the Subsidiary 

Agreement for Implementation of Section 177 of the Compact, the payment of 

the amount specified therein shall be made by the United States under Article 

I of the Agreement between the Government of the United States and the Government of the Marshall Islands for the Implementation of section 177 of the 

Compact (hereafter in this subsection referred to as the ‘‘Section 177 Agreement’’) only after the Government of the Marshall Islands has notified the 

President of the United States as to which investment management firm has 

been selected by such Government to act as Fund Manager under Article I of 

the Section 177 Agreement. 

(2) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that in the event that the President determines that an investment management firm selected by the Government of the Marshall Islands 

does not meet the requirements specified in Article I of the Section 177 Agreement, the United States shall invoke the conference and dispute resolution procedures of Article II of Title Four of the Compact. Pending the resolution of 

such a dispute and until a qualified Fund Manager has been designated, the 

Government of the Marshall Islands shall place the funds paid by the United 

States pursuant to Article I of the Section 177 Agreement into an interest-bearing escrow account. Upon designation of a qualified Fund Manager, all funds 

in the escrow account shall be transferred to the control of such Fund Manager 

for management pursuant to the Section 177 Agreement. 

(3) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that if the Government of the Marshall Islands determines that 

some other investment firm should act as Fund Manager in place of the firm 

first (or subsequently) selected by such Government, the Government of the 

Marshall Islands shall so notify the President of the United States, identifying 

the firm selected by such Government to become Fund Manager, and the President shall proceed to evaluate the qualifications of such identified firm. 

(4) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that at the end of 15 years after the effective date of the Compact, the firm then acting as Fund Manager shall transfer to the Government 

of the Marshall Islands, or to such account as such Government shall so notify 

the Fund Manager, all remaining funds and assets being managed by the Fund 

Manager under the Section 177 Agreement. 

(5) The United States made the payment called for under paragraph (1) of 

this subsection in November 1986. Nothing in this subsection creates any rights 

or obligations beyond those provided for in the original enacted version of Public 

Law 99–239. 

(d) NUCLEAR TEST EFFECTS.—In the joint resolution of January 14, 1986 (Public 

Law 99–239) Congress provided that in approving the Compact, the Congress understands and intends that the peoples of Bikini, Enewetak, Rongelap, and Utrik, who 

were affected by the United States nuclear weapons testing program in the Marshall Islands, will receive the amounts of $75,000,000 (Bikini); $48,750,000 

(Enewetak); $37,500,000 (Rongelap); and $22,500,000 (Utrik), respectively, which 

amounts shall be paid out of proceeds from the fund established under Article I, secVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00007 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
8

tion 1 of the subsidiary agreement for the implementation of section 177 of the Compact. The amounts specified in this subsection shall be in addition to any amounts 

which may be awarded to claimants pursuant to Article IV of the subsidiary agreement for the implementation of Section 177 of the Compact. Nothing in this subsection creates any rights or obligations beyond those provided for in the original 

enacted version of Public Law 99–239. 

(e) ESPOUSAL PROVISIONS.—

(1) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that it is the intention of the Congress of the United States that 

the provisions of section 177 of the Compact of Free Association and the Agreement between the Government of the United States and the Government of the 

Marshall Islands for the Implementation of Section 177 of the Compact (hereafter in this subsection referred to as the ‘‘Section 177 Agreement’’) constitute 

a full and final settlement of all claims described in Articles X and XI of the 

Section 177 Agreement, and that any such claims be terminated and barred except insofar as provided for in the Section 177 Agreement. 

(2) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that in furtherance of the intention of Congress as stated in 

paragraph (1) of this subsection, the Section 177 Agreement is hereby ratified 

and approved. It is the explicit understanding and intent of Congress that the 

jurisdictional limitations set forth in Article XII of such Agreement are enacted 

solely and exclusively to accomplish the objective of Article X of such Agreement 

and only as a clarification of the effect of Article X, and are not to be construed 

or implemented separately from Article X. 

(3) The amounts specified in paragraph (1) of this subsection were paid as 

specified. Nothing in this subsection creates any rights or obligations beyond 

those provided for in the original enacted version of Public Law 99–239. The 

provisions of section 177 of the Compact, section 177 of the U.S.-FSM Compact, 

section 177 of the U.S.-RMI Compact, and the Section 177 Agreement constitute 

a full and final settlement of all claims described in Articles X and XI of the 

Section 177 Agreement, and any such claims are terminated and barred. 

(f) DOE RADIOLOGICAL HEALTH CARE PROGRAM; USDA AGRICULTURAL AND

FOOD PROGRAMS.—

(1) MARSHALL ISLANDS PROGRAM.—Notwithstanding any other provision of 

law, upon the request of the Government of the Republic of the Marshall Islands, the President (either through an appropriate department or agency of the 

United States or by contract with a United States firm) shall continue to provide special medical care and logistical support thereto for the remaining 118 

(as of April 30, 2003) members of the population of Rongelap and Utrik who 

were exposed to radiation resulting from the 1954 United States thermo-nuclear 

‘‘Bravo’’ test, pursuant to Public Laws 95–134 and 96–205. 

(2) AGRICULTURAL AND FOOD PROGRAMS.—In the joint resolution of January 

14, 1986 (Public Law 99–239) Congress provided that notwithstanding any 

other provision of law, upon the request of the Government of the Marshall Islands, for the first fifteen years after the effective date of the Compact, the 

President (either through an appropriate department or agency of the United 

States or by contract with a United States firm or by a grant to the Government 

of the Republic of the Marshall Islands which may further contract only with 

a United States firm or a Republic of the Marshall Islands firm, the owners, 

officers and majority of the employees of which are citizens of the United States 

or the Republic of the Marshall Islands) shall provide technical and other assistance—

(A) without reimbursement, to continue the planting and agricultural 

maintenance program on Enewetak; 

(B) without reimbursement, to continue the food programs of the Bikini 

and Enewetak people described in section 1(d) of Article II of the Subsidiary 

Agreement for the Implementation of Section 177 of the Compact and for 

continued waterborne transportation of agricultural products to Enewetak 

including operations and maintenance of the vessel used for such purposes. 

The President shall ensure the assistance provided under these programs reflects the changes in the population since the inception of such programs. 

(3) PAYMENTS.—In the joint resolution of January 14, 1986 (Public Law 99–

239) Congress provided that payments under this subsection shall be provided 

to such extent or in such amounts as are necessary for services and other assistance provided pursuant to this subsection. It is the sense of Congress that after 

the periods of time specified in paragraphs (1) and (2) of this subsection, consideration will be given to such additional funding for these programs as may be 

9

necessary. Nothing in this subsection creates any rights or obligations beyond 

those provided for in the original enacted version of Public Law 99–239. 

(g) RONGELAP.—

(1) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that because Rongelap was directly affected by fallout from a 

1954 United States thermonuclear test and because the Rongelap people remain 

unconvinced that it is safe to continue to live on Rongelap Island, it is the intent of Congress to take such steps (if any) as may be necessary to overcome 

the effects of such fallout on the habitability of Rongelap Island, and to restore 

Rongelap Island, if necessary, so that it can be safely inhabited. Accordingly, 

it is the expectation of the Congress that the Government of the Marshall Islands shall use such portion of the funds specified in Article II, section 1(e) of 

the subsidiary agreement for the implementation of section 177 of the Compact 

as are necessary for the purpose of contracting with a qualified scientist or 

group of scientists to review the data collected by the Department of Energy relating to radiation levels and other conditions on Rongelap Island resulting from 

the thermonuclear test. It is the expectation of the Congress that the Government of the Marshall Islands, after consultation with the people of Rongelap, 

shall select the party to review such data, and shall contract for such review 

and for submission of a report to the President of the United States and the 

Congress as to the results thereof. 

(2) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that the purpose of the review referred to in paragraph (1) of 

this subsection shall be to establish whether the data cited in support of the 

conclusions as to the habitability of Rongelap Island, as set forth in the Department of Energy report entitled: ‘‘The Meaning of Radiation for Those Atolls in 

the Northern Part of the Marshall Islands That Were Surveyed in 1978’’, dated 

November 1982, are adequate and whether such conclusions are fully supported 

by the data. If the party reviewing the data concludes that such conclusions as 

to habitability are fully supported by adequate data, the report to the President 

of the United States and the Congress shall so state. If the party reviewing the 

data concludes that the data are inadequate to support such conclusions as to 

habitability or that such conclusions as to habitability are not fully supported 

by the data, the Government of the Marshall Islands shall contract with an appropriate scientist or group of scientists to undertake a complete survey of radiation and other effects of the nuclear testing program relating to the habitability of Rongelap Island. Such sums as are necessary for such survey and report concerning the results thereof and as to steps needed to restore the habitability of Rongelap Island are authorized to be made available to the Government of the Marshall Islands. 

(3) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that it is the intent of Congress that such steps (if any) as are 

necessary to restore the habitability of Rongelap Island and return the 

Rongelap people to their homeland will be taken by the United States in consultation with the Government of the Marshall Islands and, in accordance with 

its authority under the Constitution of the Marshall Islands, the Rongelap local 

government council. Nothing in this subsection creates any rights or obligations 

beyond those provided for in the original enacted version of Public Law 99–239. 

(h) FOUR ATOLL HEALTH CARE PROGRAM.—

(1) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that services provided by the United States Public Health Service or any other United States agency pursuant to section 1(a) of Article II of 

the Agreement for the Implementation of Section 177 of the Compact (hereafter 

in this subsection referred to as the ‘‘Section 177 Agreement’’) shall be only for 

services to the people of the Atolls of Bikini, Enewetak, Rongelap, and Utrik 

who were affected by the consequences of the United States nuclear testing program, pursuant to the program described in Public Law 95–134 (91 Stat. 1159) 

and Public Law 96–205 (94 Stat. 84) and their descendants (and any other persons identified as having been so affected if such identification occurs in the 

manner described in such public laws). Nothing in this subsection shall be construed as prejudicial to the views or policies of the Government of the Marshall 

Islands as to the persons affected by the consequences of the United States nuclear testing program. 

(2) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that at the end of the first year after the effective date of the 

Compact and at the end of each year thereafter, the providing agency or agencies shall return to the Government of the Marshall Islands any unexpended 

10

funds to be returned to the Fund Manager (as described in Article I of the Section 177 Agreement) to be covered into the Fund to be available for future use. 

(3) In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that the Fund Manager shall retain the funds returned by the 

Government of the Marshall Islands pursuant to paragraph (2) of this subsection, shall invest and manage such funds, and at the end of 15 years after 

the effective date of the Compact, shall make from the total amount so retained 

and the proceeds thereof annual disbursements sufficient to continue to make 

payments for the provision of health services as specified in paragraph (1) of 

this subsection to such extent as may be provided in contracts between the Government of the Marshall Islands and appropriate United States providers of 

such health services. Nothing in this subsection creates any rights or obligations beyond those provided for in the original enacted version of Public Law 

99–239. 

(i) ENJEBI COMMUNITY TRUST FUND.—In the joint resolution of January 14, 

1986 (Public Law 99–239) Congress provided that notwithstanding any other provision of law, the Secretary of the Treasury shall establish on the books of the Treasury of the United States a fund having the status specified in Article V of the subsidiary agreement for the implementation of Section 177 of the Compact, to be 

known as the ‘‘Enjebi Community Trust Fund’’ (hereafter in this subsection referred 

to as the ‘‘Fund’’), and shall credit to the Fund the amount of $7,500,000. Such 

amount, which shall be ex gratia, shall be in addition to and not charged against 

any other funds provided for in the Compact and its subsidiary agreements, this 

joint resolution, or any other Act. Upon receipt by the President of the United 

States of the agreement described in this subsection, the Secretary of the Treasury, 

upon request of the Government of the Marshall Islands, shall transfer the Fund 

to the Government of the Marshall Islands, provided that the Government of the 

Marshall Islands agrees as follows: 

(1) ENJEBI TRUST AGREEMENT.—In the joint resolution of January 14, 1986 

(Public Law 99–239) Congress provided that the Government of the Marshall 

Islands and the Enewetak Local Government Council, in consultation with the 

people of Enjebi, shall provide for the creation of the Enjebi Community Trust 

Fund and the employment of the manager of the Enewetak Fund established 

pursuant to the Section 177 Agreement as trustee and manager of the Enjebi 

Community Trust Fund, or, should the manager of the Enewetak Fund not be 

acceptable to the people of Enjebi, another United States investment manager 

with substantial experience in the administration of trusts and with funds 

under management in excess of 250 million dollars. 

(2) MONITOR CONDITIONS.—In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that upon the request of the Government of 

the Marshall Islands, the United States shall monitor the radiation and other 

conditions on Enjebi and within one year of receiving such a request shall report to the Government of the Marshall Islands when the people of Enjebi may 

resettle Enjebi under circumstances where the radioactive contamination at 

Enjebi, including contamination derived from consumption of locally grown food 

products, can be reduced or otherwise controlled to meet whole body Federal radiation protection standards for the general population, including mean annual 

dose and mean 30-year cumulative dose standards. 

(3) RESETTLEMENT OF ENJEBI.—In the joint resolution of January 14, 1986 

(Public Law 99–239) Congress provided that in the event that the United States 

determines that the people of Enjebi can within 25 years of January 14, 1986, 

resettle Enjebi under the conditions set forth in paragraph (2) of this subsection, then upon such determination there shall be available to the people of 

Enjebi from the Fund such amounts as are necessary for the people of Enjebi 

to do the following, in accordance with a plan developed by the Enewetak Local 

Government Council and the people of Enjebi, and concurred with by the Government of the Marshall Islands to assure consistency with the government’s 

overall economic development plan: 

(A) Establish a community on Enjebi Island for the use of the people 

of Enjebi. 

(B) Replant Enjebi with appropriate food-bearing and other vegetation. 

(4) RESETTLEMENT OF OTHER LOCATION.—In the joint resolution of January 

14, 1986 (Public Law 99–239) Congress provided that in the event that the 

United States determines that within 25 years of January 14, 1986, the people 

of Enjebi cannot resettle Enjebi without exceeding the radiation standards set 

forth in paragraph (2) of this subsection, then the fund manager shall be directed by the trust instrument to distribute the Fund to the people of Enjebi 

for their resettlement at some other location in accordance with a plan, develVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00010 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
11

oped by the Enewetak Local Government Council and the people of Enjebi and 

concurred with by the Government of the Marshall Islands, to assure consistency with the government’s overall economic development plan. 

(5) INTEREST FROM FUND.—In the joint resolution of January 14, 1986 (Public Law 99–239) Congress provided that prior to and during the distribution of 

the corpus of the Fund pursuant to paragraphs (3) and (4) of this subsection, 

the people of Enjebi may, if they so request, receive the interest earned by the 

Fund on no less frequent a basis than quarterly. 

(6) DISCLAIMER OF LIABILITY.—In the joint resolution of January 14, 1986 

(Public Law 99–239) Congress provided that neither under the laws of the Marshall Islands nor under the laws of the United States, shall the Government 

of the United States be liable for any loss or damage to person or property in 

respect to the resettlement of Enjebi by the people of Enjebi, pursuant to the 

provision of this subsection or otherwise. 

(7) STATUS OF PAYMENT.—The ex gratia payment provided for in this subsection was made. Nothing in this subsection creates any rights or obligations 

beyond those provided for in the original enacted version of Public Law 99–239. 

(j) BIKINI ATOLL CLEANUP.— (1) DECLARATION OF POLICY.—In the joint resolution of January 14, 1986 

(Public Law 99–239), the Congress determined and declared that it is the policy 

of the United States, to be supported by the full faith and credit of the United 

States, that because the United States, through its nuclear testing and other 

activities, rendered Bikini Atoll unsafe for habitation by the people of Bikini, 

the United States will fulfill its responsibility for restoring Bikini Atoll to habitability, as set forth in paragraph (2) and (3) of this subsection. 

(2) CLEANUP FUNDS.—The joint resolution of January 14, 1986 (Public Law 

99–239) authorized to be appropriated such sums as necessary to implement the 

settlement agreement of March 15, 1985, in The People of Bikini, et al. against 

United States of America, et al., Civ. No. 84–0425 (D. Ha.). 

(3) CONDITIONS OF FUNDING.—In the joint resolution of January 14, 1986 

(Public Law 99–239) the Congress provided that the funds referred to in paragraph (2) were to be made available pursuant to Article VI, Section 1 of the 

Compact Section 177 Agreement upon completion of the events set forth in the 

settlement agreement referred to in paragraph (2) of this subsection. Nothing 

in this subsection creates any rights or obligations beyond those provided for 

in the original enacted version of Public Law 99–239. 

(k) AGREEMENT ON AUDITS.—The Comptroller General (and his duly authorized 

representatives) shall have the authorities necessary to carry out his responsibilities 

under section 232 of the U.S.-RMI Compact and the agreement referred to in section 

462(b)(4) of the U.S.-RMI Compact, including the following authorities: 

(1) GENERAL AUTHORITY OF THE COMPTROLLER GENERAL TO AUDIT.—

(A) The Comptroller General of the United States (and his duly authorized representatives) shall have the authority to audit—

(i) all grants, program assistance, and other assistance provided to 

the Government of the Republic of the Marshall Islands under Articles 

I and II of Title Two of the U.S.-RMI Compact; and 

(ii) any other assistance provided by the Government of the United 

States to the Government of the Republic of the Marshall Islands. 

Such authority shall include authority for the Comptroller General to conduct or cause to be conducted any of the audits provided for in section 232 

of the U.S.-RMI Compact. The authority provided in this paragraph shall 

continue for at least three years after the last such grant has been made 

or assistance has been provided. 

(B) The Comptroller General (and his duly authorized representatives) 

shall also have authority to review any audit conducted by or on behalf of 

the Government of the United States. In this connection, the Comptroller 

General shall have access to such personnel and to such records, documents, working papers, automated data and files, and other information 

relevant to such review. 

(2) COMPTROLLER GENERAL ACCESS TO RECORDS.—

(A) In carrying out paragraph (1), the Comptroller General (and his 

duly authorized representatives) shall have such access to the personnel 

and (without cost) to records, documents, working papers, automated data 

and files, and other information relevant to such audits. The Comptroller 

General may duplicate any such records, documents, working papers, automated data and files, or other information relevant to such audits. 

(B) Such records, documents, working papers, automated data and files, 

and other information regarding each such grant or other assistance shall 

12

be maintained for at least three years after the date such grant or assistance was provided and in a manner that permits such grants, assistance 

and payments to be accounted for distinct from any other funds of the Government of the Republic of the Marshall Islands. 

(3) STATUS OF COMPTROLLER GENERAL REPRESENTATIVES.—The Comptroller 

General and his duly authorized representatives shall be immune from civil and 

criminal process relating to words spoken or written and all acts performed by 

them in their official capacity and falling within their functions, except insofar 

as such immunity may be expressly waived by the Government of the United 

States. The Comptroller General and his duly authorized representatives shall 

not be liable to arrest or detention pending trial, except in the case of a grave 

crime and pursuant to a decision by a competent judicial authority, and such 

persons shall enjoy immunity from seizure of personal property, immigration restrictions, and laws relating to alien registration, fingerprinting, and the registration of foreign agents. Such persons shall enjoy the same taxation exemptions as are set forth in Article 34 of the Vienna Convention on Diplomatic Relations. The privileges, exemptions and immunities accorded under this paragraph are not for the personal benefit of the individuals concerned but are to 

safeguard the independent exercise of their official functions. Without prejudice 

to those privileges, exemptions and immunities, it is the duty of all such persons to respect the laws and regulations of the Government of the Republic of 

the Marshall Islands. 

(4) AUDITS DEFINED.—As used in this subsection, the term ‘‘audits’’ includes 

financial, program, and management audits, including determining—

(A) whether the Government of the Republic of the Marshall Islands 

has met the requirements set forth in the U.S.-RMI Compact, or any related agreement entered into under the U.S.-RMI Compact, regarding the 

purposes for which such grants and other assistance are to be used; and 

(B) the propriety of the financial transactions of the Government of the 

Republic of the Marshall Islands pursuant to such grants or assistance. 

(5) COOPERATION BY THE REPUBLIC OF THE MARSHALL ISLANDS.—The Government of the Republic of the Marshall Islands will cooperate fully with the 

Comptroller General of the United States in the conduct of such audits as the 

Comptroller General determines necessary to enable the Comptroller General to 

fully discharge his responsibilities under this joint resolution. 

SEC. 104. INTERPRETATION OF AND UNITED STATES POLICY REGARDING U.S.-FSM COMPACT 

AND U.S.-RMI COMPACT. 

(a) HUMAN RIGHTS.—In approving the U.S.-FSM Compact and the U.S.-RMI 

Compact, the Congress notes the conclusion in the Statement of Intent of the Report 

of The Future Political Status Commission of the Congress of Micronesia in July, 

1969, that ‘‘our recommendation of a free associated state is indissolubly linked to 

our desire for such a democratic, representative, constitutional government’’ and 

notes that such desire and intention are reaffirmed and embodied in the Constitutions of the Federated States of Micronesia and the Republic of the Marshall Islands. The Congress also notes and specifically endorses the preamble to the U.S.-

FSM Compact and the U.S.-RMI Compact, which affirms that the governments of 

the parties to the U.S.-FSM Compact and the U.S.-RMI Compact are founded upon 

respect for human rights and fundamental freedoms for all. The Secretary of State 

shall include in the annual reports on the status of internationally recognized 

human rights in foreign countries, which are submitted to the Congress pursuant 

to sections 116 and 502B of the Foreign Assistance Act of 1961 (22 U.S.C 2151n, 

2304), a full and complete report regarding the status of internationally recognized 

human rights in the Federated States of Micronesia and the Republic of the Marshall Islands. 

(b) IMMIGRATION AND PASSPORT SECURITY.—

(1) NATURALIZED CITIZENS.—The rights of a bona fide naturalized citizen of 

the Federated States of Micronesia or the Republic of the Marshall Islands to 

enter the United States, to lawfully engage therein in occupations, and to establish residence therein as a nonimmigrant, to the extent such rights are provided 

under section 141 of the U.S.-FSM Compact and U.S.-RMI Compact, shall not 

be deemed to extend to any such naturalized citizen with respect to whom circumstances associated with the acquisition of the status of a naturalized citizen 

are such as to allow a reasonable inference, on the part of appropriate officials 

of the United States and subject to United States procedural requirements, that 

such naturalized status was acquired primarily in order to obtain such rights. 

(2) PASSPORTS.—Up to $250,000 of the grant assistance provided to the Federated States of Micronesia pursuant to section 211(a)(4) of the U.S.-FSM ComVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00012 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
13

pact, and up to $250,000 of the grant assistance provided to the Republic of the 

Marshall Islands pursuant to section 211(a)(4) of the U.S.-RMI Compact (or a 

greater amount of the section 211(a)(4) grant, if mutually agreed between the 

Government of the United States and the government of the Federated States 

of Micronesia or the government of the Republic of the Marshall Islands), shall 

be used for the purpose of increasing the machine-readability and security of 

passports issued by such jurisdictions. Such funds must be obligated by September 30, 2004 and in the amount and manner specified by the Secretary of 

State in consultation with the Secretary of Homeland Security and, respectively, 

with the government of the Federated States of Micronesia and the government 

of the Republic of the Marshall Islands. The United States Government is authorized to require that passports used for the purpose of seeking admission 

under section 141 of the U.S.-FSM Compact and the U.S.-RMI Compact contain 

the security enhancements funded by such assistance. 

(3) INFORMATION-SHARING.—As a condition of assistance under the U.S.-

FSM Compact and the U.S.-RMI Compact, the governments of the Federated 

States of Micronesia and the Republic of the Marshall Islands shall develop, 

prior to October 1, 2004, the capability to provide reliable and timely information as may reasonably be required by the Government of the United States in 

enforcing criminal and security-related grounds of inadmissibility and deportability under the Immigration and Nationality Act, as amended, and shall provide such information to the Government of the United States. 

(4) TRANSITION; CONSTRUCTION OF SECTIONS 141(A)(3) AND 141(A)(4) OF THE

U.S.-FSM COMPACT AND U.S.-RMI COMPACT.—The words ‘‘the effective date of this 

Compact, as amended’’ in sections 141(a)(3) and 141(a)(4) of the U.S.-FSM Compact and the U.S.-RMI Compact shall be construed to read, ‘‘on the day prior 

to the enactment by the United States Congress of the Amended Compact Act.’’. 

(c) NONALIENATION OF LANDS.—The Congress endorses and encourages the 

maintenance of the policies of the Government of the Federated States of Micronesia 

and the Government of the Republic of the Marshall Islands to regulate, in accordance with their Constitutions and laws, the alienation of permanent interests in real 

property so as to restrict the acquisition of such interests to persons of Federated 

States of Micronesia citizenship and the Republic of the Marshall Islands citizenship, respectively.

(d) NUCLEAR WASTE DISPOSAL.—In approving the U.S.-FSM Compact and the 

U.S.-RMI Compact, the Congress understands that the Government of the Federated States of Micronesia and the Government of the Republic of the Marshall Islands will not permit any other government or any nongovernmental party to conduct, in the Republic of the Marshall Islands or in the Federated States of Micronesia, any of the activities specified in subsection (a) of section 314 of the U.S.-FSM 

Compact and the U.S.-RMI Compact. 

(e) EFFECT OF U.S.-FSM COMPACT AND U.S.-RMI COMPACT ON CERTAIN U.S. 

AREAS; RELATED AUTHORIZATION AND CONTINUING APPROPRIATION.—

(1) DEFINITIONS.—For the purposes of this subsection—

(A) the term ‘‘affected jurisdiction’’ means American Samoa, Guam, the 

Commonwealth of the Northern Mariana Islands, or the State of Hawaii; 

and 

(B) the term ‘‘qualified nonimmigrant’’ means person admitted pursuant to section 141 of the U.S.-RMI or U.S.-FSM Compact, or section 141 of 

the Palau Compact who, as of a date referenced in the most recently published enumeration (i) is a resident of an affected jurisdiction, and (ii) has 

had periods of residence in American Samoa, Guam, the Commonwealth of 

the Northern Mariana Islands, or a State of the United States with a duration, in the aggregate, of less than 10 years; and their children under the 

age of 18 who were admitted as nonimmigrants under the U.S.-RMI Compact, the U.S.-FSM Compact, or the Palau Compact. As used in this subsection, the term ‘‘resident’’ shall be a person who has a ‘‘residence,’’ as that 

term is defined in section 101(a)(33) of the Immigration and Nationality 

Act, as amended. 

(2) AUTHORIZATION AND CONTINUING APPROPRIATION.—There is hereby authorized and appropriated to the Secretary of the Interior, out of any money in 

the Treasury not otherwise appropriated, to remain available until expended, 

for each fiscal year from 2004 through 2023, $15,000,000 for grants to affected 

jurisdictions to aid in defraying costs incurred by affected jurisdictions as a result of increased demands placed on health, educational, social, or public safety 

services or infrastructure related to such services due to the residence in affected jurisdictions of qualified nonimmigrants from the Republic of the MarVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00013 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
14

shall Islands, the Federated States of Micronesia, or the Republic of Palau. The 

grants shall be—

(A) awarded and administered by the Department of the Interior, Office 

of Insular Affairs, or any successor thereto, in accordance with regulations, 

policies and procedures applicable to grants so awarded and administered, 

and 

(B) used only for health, educational, social, or public safety services, 

or infrastructure related to such services, specifically affected by qualified 

nonimmigrants. 

(3) ENUMERATION.—The Secretary of the Interior shall conduct periodic 

enumerations of qualified nonimmigrants in each affected jurisdiction. The enumerations—

(A) shall be conducted at such intervals as the Secretary of the Interior 

shall determine, but no less frequently than every five years, beginning in 

fiscal year 2003; 

(B) shall be supervised by the United States Bureau of the Census or 

such other organization as the Secretary of the Interior may select; and 

(C) after fiscal year 2003, shall be funded by the Secretary of the Interior by deducting such sums as are necessary from funds appropriated pursuant to the authorization contained in paragraph (2) of this subsection. 

(4) ALLOCATION.—The Secretary of the Interior shall allocate to the government of each affected jurisdiction, on the basis of the results of the most recent 

enumeration, grants in an aggregate amount equal to the total amount of funds 

appropriated under paragraph (2) of this subsection, as reduced by any deductions authorized by subparagraph (C) of paragraph (3) of this subsection, multiplied by a ratio derived by dividing the number of qualified nonimmigrants in 

such affected jurisdiction by the total number of qualified nonimmigrants in all 

affected jurisdictions. 

(f) FOREIGN LOANS.—The Congress hereby reaffirms the United States position 

that the United States Government is not responsible for foreign loans or debt obtained by the Governments of the Federated States of Micronesia and the Republic 

of the Marshall Islands. 

SEC. 105. SUPPLEMENTAL PROVISIONS. 

(a) DOMESTIC PROGRAM REQUIREMENTS.—Except as may otherwise be provided 

in this joint resolution, all United States Federal programs and services extended 

to or operated in the Federated States of Micronesia or the Republic of the Marshall 

Islands are and shall remain subject to all applicable criteria, standards, reporting 

requirements, auditing procedures, and other rules and regulations applicable to 

such programs when operating in the United States (including its territories and 

commonwealths). 

(b) RELATIONS WITH THE FEDERATED STATES OF MICRONESIA AND THE REPUBLIC

OF THE MARSHALL ISLANDS.—

(1) Appropriations made pursuant to Article I of Title Two and subsection 

(a)(2) of section 221 of Article II of Title Two of the U.S.-FSM Compact and the 

U.S.-RMI Compact shall be made to the Secretary of the Interior, who shall 

have the authority necessary to fulfill his responsibilities for monitoring and 

managing the funds so appropriated consistent with the U.S.-FSM Compact and 

the U.S.-RMI Compact, including the agreements referred to in section 462(b)(4) 

of the U.S.-FSM Compact and U.S.-RMI Compact (relating to Fiscal Procedures) 

and the agreements referred to in section 462(b)(5) of the U.S.-FSM Compact 

and the U.S.-RMI Compact (regarding the Trust Fund).

(2) Appropriations made pursuant to subsections (a)(1) and (a)(3) through 

(6) of section 221 of Article II of Title Two of the U.S.-FSM Compact and subsection (a)(1) and (a)(3) through (5) of the U.S.-RMI Compact shall be made directly to the agencies named in those subsections. 

(3) Appropriations for services and programs referred to in subsection (b) 

of section 221 of Article II of Title Two of the U.S.-FSM Compact or U.S.-RMI 

Compact and appropriations for services and programs referred to in sections 

105(f) and 108(a) of this joint resolution shall be made to the relevant agencies 

in accordance with the terms of the appropriations for such services and programs. 

(4) Federal agencies providing programs and services to the Federated 

States of Micronesia and the Republic of the Marshall Islands shall coordinate 

with the Secretaries of the Interior and State regarding provision of such programs and services. The Secretaries of the Interior and State shall consult with 

the Secretary of the Treasury regarding overall economic conditions in the Federated States of Micronesia and the Republic of the Marshall Islands. 

15

(5) United States Government employees in either the Federated States of 

Micronesia or the Republic of the Marshall Islands are subject to the authority 

of the United States Chief of Mission, including as elaborated in section 207 of 

the Foreign Service Act and the President’s Letter of Instruction to the United 

States Chief of Mission and any order or directive of the President in effect from 

time to time. 

(6) The President is hereby authorized to appoint an Interagency Group on 

Freely Associated States’ Affairs to provide policy guidance and recommendations on implementation of the U.S.-FSM Compact and the U.S.-RMI Compact 

to Federal departments and agencies. 

(7) The three United States appointees (United States chair plus two members) to the Joint Economic Management Committee provided for in section 213 

of the U.S.-FSM Compact and Article III of the U.S.-FSM Fiscal Procedures 

Agreement referred to in section 462(b)(4) of the U.S.-FSM Compact shall be 

United States Government officers or employees. The three United States appointees (United States chair plus two members) to the Joint Economic Management and Financial Accountability Committee provided for in section 214 of the 

U.S.-RMI Compact and Article III of the U.S.-RMI Fiscal Procedures Agreement 

referred to in section 462(b)(4) of the U.S.-RMI Compact shall be United States 

Government officers or employees. 

(8) The United States voting members (United States chair plus two or 

more members) of the Trust Fund Committee appointed by the Government of 

the United States pursuant to Article 7 of the Trust Fund Agreement implementing section 215 of the U.S.-FSM Compact and referred to in section 

462(b)(5) of the U.S.-FSM Compact and any alternates designated by the Government of the United States shall be United States Government officers or employees. The United States voting members (United States chair plus two or 

more members) of the Trust Fund Committee appointed by the Government of 

the United States pursuant to Article 7 of the Trust Fund Agreement implementing section 216 of the U.S.-RMI Compact and referred to in section 

462(b)(5) of the U.S.-RMI Compact and any alternates designated by the Government of the United States shall be United States Government officers or employees. 

(9) The Trust Fund Committee provided for in Article 7 of the U.S.-FSM 

Trust Fund Agreement implementing section 215 of the U.S.-FSM Compact 

shall be a non-profit corporation incorporated under the laws of the District of 

Columbia. To the extent that any law, rule, regulation or ordinance of the District of Columbia, or of any State or political subdivision thereof in which the 

Trust Fund Committee is incorporated or doing business, impedes or otherwise 

interferes with the performance of the functions of the Trust Fund Committee 

pursuant to this joint resolution, such law, rule, regulation, or ordinance shall 

be deemed to be preempted by this joint resolution. The Trust Fund Committee 

provided for in Article 7 of the U.S.-RMI Trust Fund Agreement implementing 

section 216 of the U.S.-RMI Compact shall be a non-profit corporation incorporated under the laws of the District of Columbia. To the extent that any law, 

rule, regulation or ordinance of the District of Columbia, or of any State or political subdivision thereof in which the Trust Fund Committee is incorporated 

or doing business, impedes or otherwise interferes with the performance of the 

functions of the Trust Fund Committee pursuant to this joint resolution, such 

law, rule, regulation, or ordinance shall be deemed to be preempted by this joint 

resolution. 

(c) CONTINUING TRUST TERRITORY AUTHORIZATION.—The authorization provided 

by the Act of June 30, 1954, as amended (68 Stat. 330) shall remain available after 

the effective date of the Compact with respect to the Federated States of Micronesia 

and the Republic of the Marshall Islands for the following purposes: 

(1) Prior to October 1, 1986, for any purpose authorized by the Compact or 

the joint resolution of January 14, 1986 (Public Law 99–239). 

(2) Transition purposes, including but not limited to, completion of projects 

and fulfillment of commitments or obligations; termination of the Trust Territory Government and termination of the High Court; health and education as 

a result of exceptional circumstances; ex gratia contributions for the populations 

of Bikini, Enewetak, Rongelap, and Utrik; and technical assistance and training 

in financial management, program administration, and maintenance of infrastructure, except that, for purposes of an orderly reduction of United States programs and services in the Federated States of Micronesia, the Marshall Islands, 

and Palau, United States programs or services not specifically authorized by the 

Compact of Free Association or by other provisions of law may continue but, unVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00015 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
16

less reimbursed by the respective freely associated state, not in excess of the 

following amounts: 

(A) For fiscal year 1987, an amount not to exceed 75 per centum of the 

total amount appropriated for such programs for fiscal year 1986. 

(B) For fiscal year 1988, an amount not to exceed 50 per centum of the 

total amount appropriated for such programs for fiscal year 1986. 

(C) For fiscal year 1989, an amount not to exceed 25 per centum of the 

total amount appropriated for such programs for fiscal year 1986. 

(d) SURVIVABILITY.—In furtherance of the provisions of Title Four, Article V, 

sections 452 and 453 of the U.S.-FSM Compact and the U.S.-RMI Compact, any provisions of the U.S.-FSM Compact or the U.S.-RMI Compact which remain effective 

after the termination of the U.S.-FSM Compact or U.S.-RMI Compact by the act of 

any party thereto and which are affected in any manner by provisions of this title 

shall remain subject to such provisions.

(e) NONCOMPLIANCE SANCTIONS; ACTIONS INCOMPATIBLE WITH UNITED STATES

AUTHORITY.—The Congress expresses its understanding that the Governments of 

the Federated States of Micronesia and the Republic of the Marshall Islands will 

not act in a manner incompatible with the authority and responsibility of the United 

States for security and defense matters in or related to the Federated States of Micronesia or the Republic of the Marshall Islands pursuant to the U.S.-FSM Compact 

or the U.S.-RMI Compact, including the agreements referred to in sections 462(a)(2) 

of the U.S.-FSM Compact and 462(a)(5) of the U.S.-RMI Compact. The Congress further expresses its intention that any such act on the part of either such Government 

will be viewed by the United States as a material breach of the U.S.-FSM Compact 

or U.S.-RMI Compact. The Government of the United States reserves the right in 

the event of such a material breach of the U.S.-FSM Compact by the Government 

of the Federated States of Micronesia or the U.S.-RMI Compact by the Government 

of the Republic of the Marshall Islands to take action, including (but not limited 

to) the suspension in whole or in part of the obligations of the Government of the 

United States to that Government. 

(f) CONTINUING PROGRAMS AND LAWS.— (1) FEDERATED STATES OF MICRONESIA AND REPUBLIC OF THE MARSHALL IS- LANDS.—In addition to the programs and services set forth in section 221 of the 

Compact, and pursuant to section 222 of the Compact, the programs and services of the following agencies shall be made available to the Federated States 

of Micronesia and to the Republic of the Marshall Islands: 

(A) The Legal Services Corporation. 

(B) The Public Health Service. 

(C) The Rural Housing Service (formerly, the Farmers Home Administration) in the Marshall Islands and each of the four States of the Federated States of Micronesia: Provided, That in lieu of continuation of the 

program in the Federated States of Micronesia, the President may agree to 

transfer to the Government of the Federated States of Micronesia without 

cost, the portfolio of the Rural Housing Service applicable to the Federated 

States of Micronesia and provide such technical assistance in management 

of the portfolio as may be requested by the Federated States of Micronesia). 

(2) TORT CLAIMS.—The provisions of section 178 of the U.S.-FSM Compact 

and the U.S.-RMI Compact regarding settlement and payment of tort claims 

shall apply to employees of any Federal agency of the Government of the United 

States (and to any other person employed on behalf of any Federal agency of 

the Government of the United States on the basis of a contractual, cooperative, 

or similar agreement) which provides any service or carries out any other function pursuant to or in furtherance of any provisions of the U.S.-FSM Compact 

or the U.S.-RMI Compact or this joint resolution, except for provisions of Title 

Three of the Compact and of the subsidiary agreements related to such Title, 

in such area to which such Agreement formerly applied. 

(3) PCB CLEANUP.—The programs and services of the Environmental Protection Agency regarding PCBs shall, to the extent applicable, as appropriate, 

and in accordance with applicable law, be construed to be made available to 

such islands. 

(g) COLLEGE OF MICRONESIA.—Until otherwise provided by Act of Congress, or 

until termination of the U.S.-FSM Compact and the U.S.-RMI Compact, the College 

of Micronesia shall retain its status as a land-grant institution and its eligibility for 

all benefits and programs available to such land-grant institutions. 

(h) TRUST TERRITORY DEBTS TO U.S. FEDERAL AGENCIES.—Neither the Government of the Federated States of Micronesia nor the Government of the Marshall Islands shall be required to pay to any department, agency, independent agency, office, or instrumentality of the United States any amounts owed to such department, 

17

agency, independent agency, office, or instrumentality by the Government of the 

Trust Territory of the Pacific Islands as of the effective date of the Compact. There 

is authorized to be appropriated such sums as may be necessary to carry out the 

purposes of this subsection. 

(i) USE OF DOD MEDICAL FACILITIES.—The Secretary of Defense is hereby authorized to cooperate with government authorities responsible for provision of medical services in the Federated States of Micronesia and the Republic of the Marshall 

Islands in order to permit use of medical facilities of the Department of Defense for 

persons properly referred by such authorities in accordance with Article XVII of the 

agreements referred to in section 462(b)(7) of the U.S.-FSM Compact and the U.S.-

RMI Compact. The Secretary of Health and Human Services is hereby authorized 

and directed to continue to make the services of the National Health Service Corps 

available to the residents of the Federated States of Micronesia and the Republic 

of the Marshall Islands to the same extent and for so long as such services are authorized to be provided to persons residing in any other areas within or outside the 

United States. 

(j) TECHNICAL ASSISTANCE.—Technical assistance may be provided pursuant to 

section 224 of the U.S.-FSM Compact or the U.S.-RMI Compact by Federal agencies 

and institutions of the Government of the United States to the extent such assistance may be provided to States, territories, or units of local government. Such assistance by the Forest Service, the Natural Resources Conservation Service, the 

USDA Resource Conservation and Development Program, the Fish and Wildlife 

Service, the National Marine Fisheries Service, the United States Coast Guard, and 

the Advisory Council on Historic Preservation, the Department of the Interior, and 

other agencies providing assistance under the National Historic Preservation Act 

(80 Stat. 915; 16 U.S.C. 470–470t), shall be on a nonreimbursable basis. During the 

period the U.S.-FSM Compact and the U.S.-RMI Compact are in effect, the grant 

programs under the National Historic Preservation Act shall continue to apply to 

the Federated States of Micronesia and the Republic of the Marshall Islands in the 

same manner and to the same extent as prior to the approval of the Compact. Any 

funds provided pursuant to sections 102(a), 103(a), 103(b), 103(f), 103(g), 103(h), 

103(j), 105(c), 105(g), 105(h), 105(i), 105(j), 105(k), 105(l), and 105(m) of this joint 

resolution shall be in addition to and not charged against any amounts to be paid 

to either the Federated States of Micronesia or the Republic of the Marshall Islands 

pursuant to the U.S.-FSM Compact, the U.S.-RMI Compact, or their related subsidiary agreements. 

(k) PRIOR SERVICE BENEFITS PROGRAM.—Notwithstanding any other provision of 

law, persons who on January 1, 1985, were eligible to receive payment under the 

Prior Service Benefits Program established within the Social Security System of the 

Trust Territory of the Pacific Islands because of their services performed for the 

United States Navy or the Government of the Trust Territory of the Pacific Islands 

prior to July 1, 1968, shall continue to receive such payments on and after the effective date of the Compact. 

(l) INDEFINITE LAND USE PAYMENTS.—There are authorized to be appropriated 

such sums as may be necessary to complete repayment by the United States of any 

debts owed for the use of various lands in the Federated States of Micronesia and 

the Marshall Islands prior to January 1, 1985. 

(m) COMMUNICABLE DISEASE CONTROL PROGRAM.—There are authorized to be 

appropriated for grants to the Government of the Federated States of Micronesia 

such sums as may be necessary for purposes of establishing or continuing programs 

for the control and prevention of communicable diseases, including (but not limited 

to) cholera and Hansen’s Disease. The Secretary of the Interior shall assist the Government of the Federated States of Micronesia and the Government of the Republic 

of the Marshall Islands in designing and implementing such a program. 

(n) USER FEES.—Any person in the Federated States of Micronesia or the Republic of the Marshall Islands shall be liable for user fees, if any, for services provided in the Federated States of Micronesia or the Republic of the Marshall Islands 

by the Government of the United States to the same extent as any person in the 

United States would be liable for fees, if any, for such services in the United States. 

(o) TREATMENT OF JUDGMENTS OF COURTS OF THE FEDERATED STATES OF MICRONESIA, THE REPUBLIC OF THE MARSHALL ISLANDS, AND THE REPUBLIC OF

PALAU.—No judgment, whenever issued, of a court of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau, against the 

United States, its departments and agencies, or officials of the United States or any 

other individuals acting on behalf of the United States within the scope of their official duty, shall be honored by the United States, or be subject to recognition or enforcement in a court in the United States, unless the judgment is consistent with 

the interpretation by the United States of international agreements relevant to the 

18

judgment. In determining the consistency of a judgment with an international 

agreement, due regard shall be given to assurances made by the Executive Branch 

to the Congress of the United States regarding the proper interpretation of the 

international agreement. 

SEC. 106. CONSTRUCTION CONTRACT ASSISTANCE. 

(a) ASSISTANCE TO U.S. FIRMS.—In order to assist the Governments of the Federated States of Micronesia and of the Republic of the Marshall Islands through private sector firms which may be awarded contracts for construction or major repair 

of capital infrastructure within the Federated States of Micronesia or the Republic 

of the Marshall Islands, the United States shall consult with the Governments of 

the Federated States of Micronesia and the Republic of the Marshall Islands with 

respect to any such contracts, and the United States shall enter into agreements 

with such firms whereby such firms will, consistent with applicable requirements 

of such Governments—

(1) to the maximum extent possible, employ citizens of the Federated States 

of Micronesia and the Republic of the Marshall Islands; 

(2) to the extent that necessary skills are not possessed by citizens of the 

Federated States of Micronesia and the Republic of the Marshall Islands, provide on the job training, with particular emphasis on the development of skills 

relating to operation of machinery and routine and preventative maintenance 

of machinery and other facilities; and 

(3) provide specific training or other assistance in order to enable the Government to engage in long-term maintenance of infrastructure. 

Assistance by such firms pursuant to this section may not exceed 20 percent of the 

amount of the contract and shall be made available only to such firms which meet 

the definition of United States firm under the nationality rule for suppliers of services of the Agency for International Development (hereafter in this section referred 

to as ‘‘United States firms’’). There are authorized to be appropriated such sums as 

may be necessary for the purposes of this subsection. 

(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as may be necessary to cover any additional costs incurred by 

the Government of the Federated States of Micronesia or the Republic of the Marshall Islands if such Governments, pursuant to an agreement entered into with the 

United States, apply a preference on the award of contracts to United States firms, 

provided that the amount of such preference does not exceed 10 percent of the 

amount of the lowest qualified bid from a non-United States firm for such contract. 

SEC. 107. PROHIBITION. 

The provisions of chapter 11 of title 18, United States Code, shall apply in full 

to any individual who has served as the United States negotiator of amendments 

to the Compact or its subsidiary agreements or of related agreements or who is or 

was an officer or employee of the Office in the Department of State responsible for 

negotiating amendments to the Compact or its subsidiary agreements or who is or 

was assigned or detailed to that Office or who served on the interagency group coordinating United States policy on the Compact negotiations.

SEC. 108. COMPENSATORY ADJUSTMENTS. 

(a) ADDITIONAL PROGRAMS AND SERVICES.—In addition to the programs and 

services set forth in Section 221 of the U.S.-FSM Compact and the U.S.-RMI Compact, and pursuant to Section 222 of the U.S.-FSM Compact and the U.S.-RMI Compact, the services and programs of the following United States agencies are authorized to be made available to the Federated States of Micronesia and the Republic 

of the Marshall Islands: the Small Business Administration, Economic Development 

Administration, and the Rural Utilities Services (formerly Rural Electrification Administration); and the programs and services of the Department of Labor under the 

Workforce Investment Act of 1998; and the programs and services of the Department of Commerce relating to tourism and to marine resource development. 

(b) FURTHER AMOUNTS.—

(1) The joint resolution of January 14, 1986 (Public Law 99–239) provided 

that the governments of the Federated States of Micronesia and the Marshall 

Islands may submit to Congress reports concerning the overall financial and 

economic impacts on such areas resulting from the effect of Title IV of that joint 

resolution upon Title Two of the Compact. There were authorized to be appropriated for fiscal years beginning after September 30, 1990, such amounts as 

necessary, but not to exceed $40 million for the Federated States of Micronesia 

and $20 million for the Marshall Islands, as provided in appropriation acts, to 

further compensate the governments of such islands (in addition to the compensation provided in subsections (a) and (b) of section 111 of the joint resoluVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00018 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
19

tion of January 14, 1986 (Public Law 99–239) for adverse impacts, if any, on 

the finances and economies of such areas resulting from the effect of Title IV 

of that joint resolution upon Title Two of the Compact. The joint resolution of 

January 14, 1986 (Public Law 99–239) further provided that at the end of the 

initial fifteen-year term of the Compact, should any portion of the total amount 

of funds authorized in subsection 111 of that resolution not have been appropriated, such amount not yet appropriated may be appropriated, without regard 

to divisions between amounts authorized in subsection 111 for the Federated 

States of Micronesia and for the Marshall Islands, based on either or both such 

government’s showing of such adverse impact, if any, as provided in that subsection. 

(2) The governments of the Federated States of Micronesia and the Republic of the Marshall Islands may each submit no more than one report or request 

for further compensation under section 111 of the joint resolution of January 

14, 1986 (Public Law 99–239) and any such report or request must be submitted 

by September 30, 2004. Only adverse economic effect occurring during the initial fifteen-year term of the Compact may be considered for compensation under 

section 111 of the joint resolution of January 14, 1986 (Public Law 99–239). 

SEC. 109. AUTHORIZATION AND CONTINUING APPROPRIATION. 

(a) There are authorized and appropriated to the Department of the Interior, 

out of any money in the Treasury not otherwise appropriated, to remain available 

until expended, such sums as are necessary to carry out the purposes of sections 

211, 212(b), 215, and 217 of the U.S.-FSM-Compact and sections 211, 212, 213(b), 

216, and 218 of the U.S.-RMI Compact, in this and subsequent years. 

(b) There are authorized to be appropriated to the Departments, agencies, and 

instrumentalities named in paragraphs (1) and (3) through (6) of section 221(a) of 

the U.S.-FSM Compact and paragraphs (1) and (3) through (5) of section 221(a) of 

the U.S.-RMI Compact, such sums as are necessary to carry out the purposes of sections 221(a) of the U.S.-FSM Compact and the U.S.-RMI Compact, to remain available until expended. 

SEC. 110. PAYMENT OF CITIZENS OF THE FEDERATED STATES OF MICRONESIA, THE REPUBLIC OF THE MARSHALL ISLANDS, AND THE REPUBLIC OF PALAU EMPLOYED BY 

THE GOVERNMENT OF THE UNITED STATES IN THE CONTINENTAL UNITED 

STATES. 

Section 605 of Public Law 107–67 (the Treasury and General Government Appropriations Act, 2002; 5 U.S.C. 3101 note) is amended by striking ‘‘or the Republic 

of the Philippines,’’ in the last sentence and inserting the following: ‘‘the Republic 

of the Philippines, the Federated States of Micronesia, the Republic of the Marshall 

Islands, or the Republic of Palau,’’.

TITLE II—COMPACTS OF FREE ASSOCIATION 

WITH THE FEDERATED STATES OF MICRONESIA AND THE REPUBLIC OF THE MARSHALL ISLANDS 

SEC. 201. COMPACTS OF FREE ASSOCIATION, AS AMENDED BETWEEN THE GOVERNMENT OF 

THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE FEDERATED 

STATES OF MICRONESIA AND BETWEEN THE GOVERNMENT OF THE UNITED 

STATES OF AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF THE MARSHALL ISLANDS. 

(a) COMPACT OF FREE ASSOCIATION, AS AMENDED, BETWEEN THE GOVERNMENT

OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE FEDERATED

STATES OF MICRONESIA.—

PREAMBLE 

THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE 

GOVERNMENT OF THE FEDERATED STATES OF MICRONESIA 

Affirming that their Governments and their relationship as Governments are 

founded upon respect for human rights and fundamental freedoms for all, and that 

the people of the Federated States of Micronesia have the right to enjoy self-government; and 

Affirming the common interests of the United States of America and the Federated States of Micronesia in creating and maintaining their close and mutually 

20

beneficial relationship through the free and voluntary association of their respective 

Governments; and 

Affirming the interest of the Government of the United States in promoting the 

economic advancement and budgetary self-reliance of the Federated States of Micronesia; and 

Recognizing that their relationship until the entry into force on November 3, 

1986 of the Compact was based upon the International Trusteeship System of the 

United Nations Charter, and in particular Article 76 of the Charter; and that pursuant to Article 76 of the Charter, the people of the Federated States of Micronesia 

have progressively developed their institutions of self-government, and that in the 

exercise of their sovereign right to self-determination they, through their freely-expressed wishes, have adopted a Constitution appropriate to their particular circumstances; and 

Recognizing that the Compact reflected their common desire to terminate the 

Trusteeship and establish a government-to-government relationship which was in 

accordance with the new political status based on the freely expressed wishes of the 

people of the Federated States of Micronesia and appropriate to their particular circumstances; and 

Recognizing that the people of the Federated States of Micronesia have and retain their sovereignty and their sovereign right to self-determination and the inherent right to adopt and amend their own Constitution and form of government and 

that the approval of the entry of the Government of the Federated States of Micronesia into the Compact by the people of the Federated States of Micronesia constituted an exercise of their sovereign right to self-determination; and 

Recognizing the common desire of the people of the United States and the people of the Federated States of Micronesia to maintain their close government-to-government relationship, the United States and the Federated States of Micronesia: 

NOW, THEREFORE, MUTUALLY AGREE to continue and strengthen their relationship of free association by amending the Compact, which continues to provide 

a full measure of self-government for the people of the Federated States of Micronesia; and 

FURTHER AGREE that the relationship of free association derives from and 

is as set forth in this Compact, as amended, by the Governments of the United 

States and the Federated States of Micronesia; and that, during such relationship 

of free association, the respective rights and responsibilities of the Government of 

the United States and the Government of the Federated States of Micronesia in regard to this relationship of free association derive from and are as set forth in this 

Compact, as amended. 

TITLE ONE 

GOVERNMENTAL RELATIONS 

Article I 

Self-Government 

Section 111

The people of the Federated States of Micronesia, acting through the Government established under their Constitution, are self-governing. 

Article II 

Foreign Affairs 

Section 121

(a) The Government of the Federated States of Micronesia has the capacity to 

conduct foreign affairs and shall do so in its own name and right, except as otherwise provided in this Compact, as amended. 

(b) The foreign affairs capacity of the Government of the Federated States of 

Micronesia includes: 

(1) the conduct of foreign affairs relating to law of the sea and marine resources matters, including the harvesting, conservation, exploration or exploitation of living and non-living resources from the sea, seabed or subsoil to the 

full extent recognized under international law; 

(2) the conduct of its commercial, diplomatic, consular, economic, trade, 

banking, postal, civil aviation, communications, and cultural relations, including 

negotiations for the receipt of developmental loans and grants and the conclusion of arrangements with other governments and international and intergovVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00020 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
21

ernmental organizations, including any matters specially benefiting its individual citizens. 

(c) The Government of the United States recognizes that the Government of the 

Federated States of Micronesia has the capacity to enter into, in its own name and 

right, treaties and other international agreements with governments and regional 

and international organizations. 

(d) In the conduct of its foreign affairs, the Government of the Federated States 

of Micronesia confirms that it shall act in accordance with principles of international law and shall settle its international disputes by peaceful means. 

Section 122

The Government of the United States shall support applications by the Government of the Federated States of Micronesia for membership or other participation 

in regional or international organizations as may be mutually agreed. 

Section 123

(a) In recognition of the authority and responsibility of the Government of the 

United States under Title Three, the Government of the Federated States of Micronesia shall consult, in the conduct of its foreign affairs, with the Government of the 

United States. 

(b) In recognition of the foreign affairs capacity of the Government of the Federated States of Micronesia, the Government of the United States, in the conduct 

of its foreign affairs, shall consult with the Government of the Federated States of 

Micronesia on matters that the Government of the United States regards as relating 

to or affecting the Government of the Federated States of Micronesia. 

Section 124

The Government of the United States may assist or act on behalf of the Government of the Federated States of Micronesia in the area of foreign affairs as may 

be requested and mutually agreed from time to time.The Government of the United 

States shall not be responsible to third parties for the actions of the Government 

of the Federated States of Micronesia undertaken with the assistance or through the 

agency of the Government of the United States pursuant to this section unless expressly agreed. 

Section 125

The Government of the United States shall not be responsible for nor obligated 

by any actions taken by the Government of the Federated States of Micronesia in 

the area of foreign affairs, except as may from time to time be expressly agreed. 

Section 126

At the request of the Government of the Federated States of Micronesia and 

subject to the consent of the receiving state, the Government of the United States 

shall extend consular assistance on the same basis as for citizens of the United 

States to citizens of the Federated States of Micronesia for travel outside the Federated States of Micronesia, the United States and its territories and possessions. 

Section 127

Except as otherwise provided in this Compact, as amended, or its related agreements, all obligations, responsibilities, rights and benefits of the Government of the 

United States as Administering Authority which resulted from the application pursuant to the Trusteeship Agreement of any treaty or other international agreement 

to the Trust Territory of the Pacific Islands on November 2, 1986, are, as of that 

date, no longer assumed and enjoyed by the Government of the United States. 

Article III 

Communications 

Section 131

(a) The Government of the Federated States of Micronesia has full authority 

and responsibility to regulate its domestic and foreign communications, and the 

Government of the United States shall provide communications assistance as mutually agreed. 

(b) On May 24, 1993, the Government of the Federated States of Micronesia 

elected to undertake all functions previously performed by the Government of the 

United States with respect to domestic and foreign communications, except for those 

functions set forth in a separate agreement entered into pursuant to this section of 

the Compact, as amended. 

Section 132

The Government of the Federated States of Micronesia shall permit the Government of the United States to operate telecommunications services in the Federated 

States of Micronesia to the extent necessary to fulfill the obligations of the Government of the United States under this Compact, as amended, in accordance with the 

22

terms of separate agreements entered into pursuant to this section of the Compact, 

as amended. 

Article IV 

Immigration 

Section 141

(a) In furtherance of the special and unique relationship that exists between the 

United States and the Federated States of Micronesia, under the Compact, as 

amended, any person in the following categories may be admitted to lawfully engage 

in occupations, and establish residence as a nonimmigrant in the United States and 

its territories and possessions (the ‘‘United States’’) without regard to paragraph (5) 

or (7)(B)(i)(II) of section 212(a) of the Immigration and Nationality Act, as amended, 

8 U.S.C. 1182(a)(5) or (7)(B)(i)(II): 

(1) a person who, on November 2, 1986, was a citizen of the Trust Territory 

of the Pacific Islands, as defined in Title 53 of the Trust Territory Code in force 

on January 1, 1979, and has become and remains a citizen of the Federated 

States of Micronesia; 

(2) a person who acquires the citizenship of the Federated States of Micronesia at birth, on or after the effective date of the Constitution of the Federated 

States of Micronesia; 

(3) an immediate relative of a person referred to in paragraphs (1) or (2) 

of this section, provided that such immediate relative is a naturalized citizen 

of the Federated States of Micronesia who has been an actual resident there 

for not less than five years after attaining such naturalization and who holds 

a certificate of actual residence, and further provided, that, in the case of a 

spouse, such spouse has been married to the person referred to in paragraph 

(1) or (2) of this section for at least five years, and further provided, that the 

Government of the United States is satisfied that such naturalized citizen meets 

the requirement of subsection (b) of section 104 of Public Law 99–239 as it was 

in effect on the day prior to the effective date of this Compact, as amended; 

(4) a naturalized citizen of the Federated States of Micronesia who was an 

actual resident there for not less than five years after attaining such naturalization and who satisfied these requirements as of April 30, 2003, who continues 

to be an actual resident and holds a certificate of actual residence, and whose 

name is included in a list furnished by the Government of the Federated States 

of Micronesia to the Government of the United States no later than the effective 

date of the Compact, as amended, in form and content acceptable to the Government of the United States, provided, that the Government of the United States 

is satisfied that such naturalized citizen meets the requirement of subsection 

(b) of section 104 of Public Law 99–239 as it was in effect on the day prior to 

the effective date of this Compact, as amended; or 

(5) an immediate relative of a citizen of the Federated States of Micronesia, 

regardless of the immediate relative’s country of citizenship or period of residence in the Federated States of Micronesia, if the citizen of the Federated 

States of Micronesia is serving on active duty in any branch of the United 

States Armed Forces, or in the active reserves. 

(b) Notwithstanding subsection (a) of this section, a person who is coming to the 

United States pursuant to an adoption outside the United States, or for the purpose 

of adoption in the United States, is ineligible for admission under the Compact and 

the Compact, as amended. This subsection shall apply to any person who is or was 

an applicant for admission to the United States on or after March 1, 2003, including 

any applicant for admission in removal proceedings (including appellate proceedings) on or after March 1, 2003, regardless of the date such proceedings were 

commenced. This subsection shall have no effect on the ability of the Government 

of the United States or any United States State or local government to commence 

or otherwise take any action against any person or entity who has violated any law 

relating to the adoption of any person. 

(c) Notwithstanding subsection (a) of this section, no person who has been or 

is granted citizenship in the Federated States of Micronesia, or has been or is issued 

a Federated States of Micronesia passport pursuant to any investment, passport 

sale, or similar program has been or shall be eligible for admission to the United 

States under the Compact or the Compact, as amended. 

(d) A person admitted to the United States under the Compact, or the Compact, 

as amended, shall be considered to have the permission of the Government of the 

United States to accept employment in the United States. An unexpired Federated 

States of Micronesia passport with unexpired documentation issued by the GovernVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00022 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
23

ment of the United States evidencing admission under the Compact or the Compact, 

as amended, shall be considered to be documentation establishing identity and employment authorization under section 274A(b)(1)(B) of the Immigration and Nationality Act, as amended, 8 U.S.C. 1324a(b)(1)(B). The Government of the United 

States will take reasonable and appropriate steps to implement and publicize this 

provision, and the Government of the Federated States of Micronesia will also take 

reasonable and appropriate steps to publicize this provision. 

(e) For purposes of the Compact and the Compact, as amended: 

(1) the term ‘‘residence’’ with respect to a person means the person’s principal, actual dwelling place in fact, without regard to intent, as provided in section 101(a)(33) of the Immigration and Nationality Act, as amended, 8 U.S.C. 

1101(a)(33), and variations of the term ‘‘residence,’’ including ‘‘resident’’ and ‘‘reside,’’ shall be similarly construed; 

(2) the term ‘‘actual residence’’ means physical presence in the Federated 

States of Micronesia during eighty-five percent of the five-year period of residency required by section 141(a)(3) and (4); 

(3) the term ‘‘certificate of actual residence’’ means a certificate issued to 

a naturalized citizen by the Government of the Federated States of Micronesia 

stating that the citizen has complied with the actual residence requirement of 

section 141(a)(3) or (4); 

(4) the term ‘‘nonimmigrant’’ means an alien who is not an ‘‘immigrant’’ as 

defined in section 101(a)(15) of such Act, 8 U.S.C. 1101(a)(15); and 

(5) the term ‘‘immediate relative’’ means a spouse, or unmarried son or unmarried daughter less than 21 years of age. 

(f) The Immigration and Nationality Act, as amended, shall apply to any person 

admitted or seeking admission to the United States (other than a United States possession or territory where such Act does not apply) under the Compact or the Compact, as amended, and nothing in the Compact or the Compact, as amended, shall 

be construed to limit, preclude, or modify the applicability of, with respect to such 

person: 

(1) any ground of inadmissibility or deportability under such Act (except 

sections 212(a)(5) and 212(a)(7)(B)(i)(II) of such Act, as provided in subsection 

(a) of this section), and any defense thereto, provided that, section 237(a)(5) of 

such Act shall be construed and applied as if it reads as follows: ‘‘any alien who 

has been admitted under the Compact, or the Compact, as amended, who cannot show that he or she has sufficient means of support in the United States, 

is deportable’’; 

(2) the authority of the Government of the United States under section 

214(a)(1) of such Act to provide that admission as a nonimmigrant shall be for 

such time and under such conditions as the Government of the United States 

may by regulations prescribe; 

(3) Except for the treatment of certain documentation for purposes of section 274A(b)(1)(B) of such Act as provided by subsection (d) of this section of 

the Compact, as amended, any requirement under section 274A, including but 

not limited to section 274A(b)(1)(E); 

(4) Section 643 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, Public Law 104–208, and actions taken pursuant to section 

643; and 

(5) the authority of the Government of the United States otherwise to administer and enforce the Immigration and Nationality Act, as amended, or other 

United States law. 

(g) Any authority possessed by the Government of the United States under this 

section of the Compact or the Compact, as amended, may also be exercised by the 

Government of a territory or possession of the United States where the Immigration 

and Nationality Act, as amended, does not apply, to the extent such exercise of authority is lawful under a statute or regulation of such territory or possession that 

is authorized by the laws of the United States. 

(h) Subsection (a) of this section does not confer on a citizen of the Federated 

States of Micronesia the right to establish the residence necessary for naturalization 

under the Immigration and Nationality Act, as amended, or to petition for benefits 

for alien relatives under that Act. Subsection (a) of this section, however, shall not 

prevent a citizen of the Federated States of Micronesia from otherwise acquiring 

such rights or lawful permanent resident alien status in the United States. 

Section 142

(a) Any citizen or national of the United States may be admitted, to lawfully 

engage in occupations, and reside in the Federated States of Micronesia, subject to 

the rights of the Government of the Federated States of Micronesia to deny entry 

to or deport any such citizen or national as an undesirable alien. Any determination 

24

of inadmissibility or deportability shall be based on reasonable statutory grounds 

and shall be subject to appropriate administrative and judicial review within the 

Federated States of Micronesia. If a citizen or national of the United States is a 

spouse of a citizen of the Federated States of Micronesia, the Government of the 

Federated States of Micronesia shall allow the United States citizen spouse to establish residence. Should the Federated States of Micronesia citizen spouse predecease 

the United States citizen spouse during the marriage, the Government of the Federated States of Micronesia shall allow the United States citizen spouse to continue 

to reside in the Federated States of Micronesia. 

(b) In enacting any laws or imposing any requirements with respect to citizens 

and nationals of the United States entering the Federated States of Micronesia 

under subsection (a) of this section, including any grounds of inadmissibility or deportability, the Government of the Federated States of Micronesia shall accord to 

such citizens and nationals of the United States treatment no less favorable than 

that accorded to citizens of other countries. 

(c) Consistent with subsection (a) of this section, with respect to citizens and 

nationals of the United States seeking to engage in employment or invest in the 

Federated States of Micronesia, the Government of the Federated States of Micronesia shall adopt immigration-related procedures no less favorable than those adopted by the Government of the United States with respect to citizens of the Federated 

States of Micronesia seeking employment in the United States. 

Section 143

Any person who relinquishes, or otherwise loses, his United States nationality 

or citizenship, or his Federated States of Micronesia citizenship, shall be ineligible 

to receive the privileges set forth in sections 141 and 142. Any such person may 

apply for admission to the United States or the Federated States of Micronesia, as 

the case may be, in accordance with any other applicable laws of the United States 

or the Federated States of Micronesia relating to immigration of aliens from other 

countries. The laws of the Federated States of Micronesia or the United States, as 

the case may be, shall dictate the terms and conditions of any such person’s stay. 

Article V 

Representation 

Section 151

Relations between the Government of the United States and the Government 

of the Federated States of Micronesia shall be conducted in accordance with the Vienna Convention on Diplomatic Relations. In addition to diplomatic missions and 

representation, the Governments may establish and maintain other offices and designate other representatives on terms and in locations as may be mutually agreed. 

Section 152

(a) Any citizen or national of the United States who, without authority of the 

United States, acts as the agent of the Government of the Federated States of Micronesia with regard to matters specified in the provisions of the Foreign Agents 

Registration Act of 1938, as amended (22 U.S.C. 611 et seq.), that apply with respect to an agent of a foreign principal shall be subject to the requirements of such 

Act. Failure to comply with such requirements shall subject such citizen or national 

to the same penalties and provisions of law as apply in the case of the failure of 

such an agent of a foreign principal to comply with such requirements. For purposes 

of the Foreign Agents Registration Act of 1938, the Federated States of Micronesia 

shall be considered to be a foreign country. 

(b) Subsection (a) of this section shall not apply to a citizen or national of the 

United States employed by the Government of the Federated States of Micronesia 

with respect to whom the Government of the Federated States of Micronesia from 

time to time certifies to the Government of the United States that such citizen or 

national is an employee of the Federated States of Micronesia whose principal duties are other than those matters specified in the Foreign Agents Registration Act 

of 1938, as amended, that apply with respect to an agent of a foreign principal. The 

agency or officer of the United States receiving such certifications shall cause them 

to be filed with the Attorney General, who shall maintain a publicly available list 

of the persons so certified. 

Article VI 

Environmental Protection 

Section 161

25

The Governments of the United States and the Federated States of Micronesia 

declare that it is their policy to promote efforts to prevent or eliminate damage to 

the environment and biosphere and to enrich understanding of the natural resources of the Federated States of Micronesia. In order to carry out this policy, the 

Government of the United States and the Government of the Federated States of 

Micronesia agree to the following mutual and reciprocal undertakings. 

(a) The Government of the United States: 

(1) shall continue to apply the environmental controls in effect on November 

2, 1986 to those of its continuing activities subject to section 161(a)(2), unless 

and until those controls are modified under sections 161(a)(3) and 161(a)(4); 

(2) shall apply the National Environmental Policy Act of 1969, 83 Stat. 852, 

42 U.S.C. 4321 et seq., to its activities under the Compact, as amended, and 

its related agreements as if the Federated States of Micronesia were the United 

States; 

(3) shall comply also, in the conduct of any activity requiring the preparation of an Environmental Impact Statement under section 161(a)(2), with standards substantively similar to those required by the following laws of the United 

States, taking into account the particular environment of the Federated States 

of Micronesia: the Endangered Species Act of 1973, as amended, 87 Stat. 884, 

16 U.S.C. 1531 et seq.; the Clean Air Act, as amended, 77 Stat. 392, 42 U.S.C. 

Supp. 7401 et seq.; the Clean Water Act (Federal Water Pollution Control Act), 

as amended, 86 Stat. 896, 33 U.S.C. 1251 et seq.; Title I of the Marine Protection, Research and Sanctuaries Act of 1972 (the Ocean Dumping Act), 33 U.S.C. 

1411 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. 2601 et 

seq.; the Solid Waste Disposal Act, as amended, 42 U.S.C. 6901 et seq.; and 

such other environmental protection laws of the United States and of the Federated States of Micronesia, as may be mutually agreed from time to time with 

the Government of the Federated States of Micronesia; and 

(4) shall develop, prior to conducting any activity requiring the preparation 

of an Environmental Impact Statement under section 161(a)(2), written standards and procedures, as agreed with the Government of the Federated States 

of Micronesia, to implement the substantive provisions of the laws made applicable to U.S. Government activities in the Federated States of Micronesia, pursuant to section 161(a)(3). 

(b) The Government of the Federated States of Micronesia shall continue to develop and implement standards and procedures to protect its environment. As a reciprocal obligation to the undertakings of the Government of the United States 

under this Article, the Federated States of Micronesia, taking into account its particular environment, shall continue to develop and implement standards for environmental protection substantively similar to those required of the Government of the 

United States by section 161(a)(3) prior to its conducting activities in the Federated 

States of Micronesia, substantively equivalent to activities conducted there by the 

Government of the United States and, as a further reciprocal obligation, shall enforce those standards. 

(c) Section 161(a), including any standard or procedure applicable thereunder, 

and section 161(b) may be modified or superseded in whole or in part by agreement 

of the Government of the United States and the Government of the Federated 

States of Micronesia. 

(d) In the event that an Environmental Impact Statement is no longer required 

under the laws of the United States for major Federal actions significantly affecting 

the quality of the human environment, the regulatory regime established under sections 161(a)(3) and 161(a)(4) shall continue to apply to such activities of the Government of the United States until amended by mutual agreement. 

(e) The President of the United States may exempt any of the activities of the 

Government of the United States under this Compact, as amended, and its related 

agreements from any environmental standard or procedure which may be applicable 

under sections 161(a)(3) and 161(a)(4) if the President determines it to be in the 

paramount interest of the Government of the United States to do so, consistent with 

Title Three of this Compact, as amended, and the obligations of the Government of 

the United States under international law. Prior to any decision pursuant to this 

subsection, the views of the Government of the Federated States of Micronesia shall 

be sought and considered to the extent practicable. If the President grants such an 

exemption, to the extent practicable, a report with his reasons for granting such exemption shall be given promptly to the Government of the Federated States of Micronesia. 

(f) The laws of the United States referred to in section 161(a)(3) shall apply to 

the activities of the Government of the United States under this Compact, as 

amended, and its related agreements only to the extent provided for in this section. 

26

Section 162

The Government of the Federated States of Micronesia may bring an action for 

judicial review of any administrative agency action or any activity of the Government of the United States pursuant to section 161(a) for enforcement of the obligations of the Government of the United States arising thereunder. The United States 

District Court for the District of Hawaii and the United States District Court for 

the District of Columbia shall have jurisdiction over such action or activity, and over 

actions brought under section 172(b) which relate to the activities of the Government of the United States and its officers and employees, governed by section 161, 

provided that: 

(a) Such actions may only be civil actions for any appropriate civil relief 

other than punitive damages against the Government of the United States or, 

where required by law, its officers in their official capacity; no criminal actions 

may arise under this section. 

(b) Actions brought pursuant to this section may be initiated only by the 

Government of the Federated States of Micronesia. 

(c) Administrative agency actions arising under section 161 shall be reviewed pursuant to the standard of judicial review set forth in 5 U.S.C. 706. 

(d) The United States District Court for the District of Hawaii and the 

United States District Court for the District of Columbia shall have jurisdiction 

to issue all necessary processes, and the Government of the United States 

agrees to submit itself to the jurisdiction of the court; decisions of the United 

States District Court shall be reviewable in the United States Court of Appeals 

for the Ninth Circuit or the United States Court of Appeals for the District of 

Columbia, respectively, or in the United States Supreme Court as provided by 

the laws of the United States. 

(e) The judicial remedy provided for in this section shall be the exclusive 

remedy for the judicial review or enforcement of the obligations of the Government of the United States under this Article and actions brought under section 

172(b) which relate to the activities of the Government of the United States and 

its officers and employees governed by section 161. 

(f) In actions pursuant to this section, the Government of the Federated 

States of Micronesia shall be treated as if it were a United States citizen. 

Section 163

(a) For the purpose of gathering data necessary to study the environmental effects of activities of the Government of the United States subject to the requirements of this Article, the Government of the Federated States of Micronesia shall 

be granted access to facilities operated by the Government of the United States in 

the Federated States of Micronesia, to the extent necessary for this purpose, except 

to the extent such access would unreasonably interfere with the exercise of the authority and responsibility of the Government of the United States under Title Three. 

(b) The Government of the United States, in turn, shall be granted access to 

the Federated States of Micronesia for the purpose of gathering data necessary to 

discharge its obligations under this Article, except to the extent such access would 

unreasonably interfere with the exercise of the authority and responsibility of the 

Government of the Federated States of Micronesia under Title One, and to the extent necessary for this purpose shall be granted access to documents and other information to the same extent similar access is provided the Government of the Federated States of Micronesia under the Freedom of Information Act, 5 U.S.C. 552. 

(c) The Government of the Federated States of Micronesia shall not impede efforts by the Government of the United States to comply with applicable standards 

and procedures. 

Article VII 

General Legal Provisions 

Section 171

Except as provided in this Compact, as amended, or its related agreements, the 

application of the laws of the United States to the Trust Territory of the Pacific Islands by virtue of the Trusteeship Agreement ceased with respect to the Federated 

States of Micronesia on November 3, 1986, the date the Compact went into effect. 

Section 172

(a) Every citizen of the Federated States of Micronesia who is not a resident 

of the United States shall enjoy the rights and remedies under the laws of the 

United States enjoyed by any non-resident alien. 

(b) The Government of the Federated States of Micronesia and every citizen of 

the Federated States of Micronesia shall be considered to be a ‘‘person’’ within the 

27

meaning of the Freedom of Information Act, 5 U.S.C. 552, and of the judicial review 

provisions of the Administrative Procedure Act, 5 U.S.C. 701–706, except that only 

the Government of the Federated States of Micronesia may seek judicial review 

under the Administrative Procedure Act or judicial enforcement under the Freedom 

of Information Act when such judicial review or enforcement relates to the activities 

of the Government of the United States governed by sections 161 and 162. 

Section 173

The Governments of the United States and the Federated States of Micronesia 

agree to adopt and enforce such measures, consistent with this Compact, as amended, and its related agreements, as may be necessary to protect the personnel, property, installations, services, programs and official archives and documents maintained by the Government of the United States in the Federated States of Micronesia pursuant to this Compact, as amended, and its related agreements and by the 

Government of the Federated States of Micronesia in the United States pursuant 

to this Compact, as amended, and its related agreements. 

Section 174

Except as otherwise provided in this Compact, as amended, and its related 

agreements: 

(a) The Government of the Federated States of Micronesia, and its agencies 

and officials, shall be immune from the jurisdiction of the court of the United 

States, and the Government of the United States, and its agencies and officials, 

shall be immune from the jurisdiction of the courts of the Federated States of 

Micronesia. 

(b) The Government of the United States accepts responsibility for and 

shall pay: 

(1) any unpaid money judgment rendered by the High Court of the 

Trust Territory of the Pacific Islands against the Government of the United 

States with regard to any cause of action arising as a result of acts or omissions of the Government of the Trust Territory of the Pacific Islands or the 

Government of the United States prior to November 3, 1986; 

(2) any claim settled by the claimant and the Government of the Trust 

Territory of the Pacific Islands but not paid as of the November 3, 1986; 

and 

(3) settlement of any administrative claim or of any action before a 

court of the Trust Territory of the Pacific Islands or the Government of the 

United States, arising as a result of acts or omissions of the Government 

of the Trust Territory of the Pacific Islands or the Government of the 

United States. 

(c) Any claim not referred to in section 174(b) and arising from an act or 

omission of the Government of the Trust Territory of the Pacific Islands or the 

Government of the United States prior to the effective date of the Compact shall 

be adjudicated in the same manner as a claim adjudicated according to section 

174(d). In any claim against the Government of the Trust Territory of the Pacific Islands, the Government of the United States shall stand in the place of 

the Government of the Trust Territory of the Pacific Islands. A judgment on any 

claim referred to in section 174(b) or this subsection, not otherwise satisfied by 

the Government of the United States, may be presented for certification to the 

United States Court of Appeals for the Federal Circuit, or its successor courts, 

which shall have jurisdiction therefore, notwithstanding the provisions of 28 

U.S.C. 1502, and which court’s decisions shall be reviewable as provided by the 

laws of the United States. The United States Court of Appeals for the Federal 

Circuit shall certify such judgment, and order payment thereof, unless it finds, 

after a hearing, that such judgment is manifestly erroneous as to law or fact, 

or manifestly excessive. In either of such cases the United States Court of Appeals for the Federal Circuit shall have jurisdiction to modify such judgment. 

(d) The Government of the Federated States of Micronesia shall not be immune from the jurisdiction of the courts of the United States, and the Government of the United States shall not be immune from the jurisdiction of the 

courts of the Federated States of Micronesia in any civil case in which an exception to foreign state immunity is set forth in the Foreign Sovereign Immunities 

Act (28 U.S.C. 1602 et seq.) or its successor statutes. 

Section 175

(a) A separate agreement, which shall come into effect simultaneously with this 

Compact, as amended, and shall have the force of law, shall govern mutual assistance and cooperation in law enforcement matters, including the pursuit, capture, 

imprisonment and extradition of fugitives from justice and the transfer of prisoners, 

as well as other law enforcement matters. In the United States, the laws of the 

United States governing international extradition, including 18 U.S.C. 3184, 3186 

28

and 3188–95, shall be applicable to the extradition of fugitives under the separate 

agreement, and the laws of the United States governing the transfer of prisoners, 

including 18 U.S.C. 4100–15, shall be applicable to the transfer of prisoners under 

the separate agreement; and 

(b) A separate agreement, which shall come into effect simultaneously with this 

Compact, as amended, and shall have the force of law, shall govern requirements 

relating to labor recruitment practices, including registration, reporting, suspension 

or revocation of authorization to recruit persons for employment in the United 

States, and enforcement for violations of such requirements. 

Section 176

The Government of the Federated States of Micronesia confirms that final judgments in civil cases rendered by any court of the Trust Territory of the Pacific Islands shall continue in full force and effect, subject to the constitutional power of 

the courts of the Federated States of Micronesia to grant relief from judgments in 

appropriate cases. 

Section 177

Section 177 of the Compact entered into force with respect to the Federated 

States of Micronesia on November 3, 1986 as follows: 

‘‘(a) The Government of the United States accepts the responsibility for 

compensation owing to citizens of the Marshall Islands, or the Federated States 

of Micronesia, or Palau for loss or damage to property and person of the citizens 

of the Marshall Islands, or the Federated States of Micronesia, resulting from 

the nuclear testing program which the Government of the United States conducted in the Northern Marshall Islands between June 30, 1946, and August 

18, 1958. 

‘‘(b) The Government of the United States and the Government of the Marshall Islands shall set forth in a separate agreement provisions for the just and 

adequate settlement of all such claims which have arisen in regard to the Marshall Islands and its citizens and which have not as yet been compensated or 

which in the future may arise, for the continued administration by the Government of the United States of direct radiation related medical surveillance and 

treatment programs and radiological monitoring activities and for such additional programs and activities as may be mutually agreed, and for the assumption by the Government of the Marshall Islands of responsibility for enforcement of limitations on the utilization of affected areas developed in cooperation 

with the Government of the United States and for the assistance by the Government of the United States in the exercise of such responsibility as may be mutually agreed. This separate agreement shall come into effect simultaneously with 

this Compact and shall remain in effect in accordance with its own terms. 

‘‘(c) The Government of the United States shall provide to the Government 

of the Marshall Islands, on a grant basis, the amount of $150 million to be paid 

and distributed in accordance with the separate agreement referred to in this 

Section, and shall provide the services and programs set forth in this separate 

agreement, the language of which is incorporated into this Compact.’’

The Compact, as amended, makes no changes to, and has no effect upon, Section 177 of the Compact, nor does the Compact, as amended, change or affect the 

separate agreement referred to in Section 177 of the Compact including Articles IX 

and X of that separate agreement, and measures taken by the parties thereunder. 

Section 178

(a) The Federal agencies of the Government of the United States that provide 

the services and related programs in the Federated States of Micronesia pursuant 

to Title Two are authorized to settle and pay tort claims arising in the Federated 

States of Micronesia from the activities of such agencies or from the acts or omissions of the employees of such agencies. Except as provided in section 178(b), the 

provisions of 28 U.S.C. 2672 and 31 U.S.C. 1304 shall apply exclusively to such administrative settlements and payments. 

(b) Claims under section 178(a) that cannot be settled under section 178(a) shall 

be disposed of exclusively in accordance with Article II of Title Four. Arbitration 

awards rendered pursuant to this subsection shall be paid out of funds under 31 

U.S.C. 1304. 

(c) The Government of the United States and the Government of the Federated 

States of Micronesia shall, in the separate agreement referred to in section 231, provide for: 

(1) the administrative settlement of claims referred to in section 178(a), including designation of local agents in each State of the Federated States of Micronesia; such agents to be empowered to accept, investigate and settle such 

claims, in a timely manner, as provided in such separate agreements; and 

29

(2) arbitration, referred to in section 178(b), in a timely manner, at a site 

convenient to the claimant, in the event a claim is not otherwise settled pursuant to section 178(a). 

(d) The provisions of section 174(d) shall not apply to claims covered by this section. 

(e) Except as otherwise explicitly provided by law of the United States, neither 

the Government of the United States, its instrumentalities, nor any person acting 

on behalf of the Government of the United States, shall be named a party in any 

action based on, or arising out of, the activity or activities of a recipient of any grant 

or other assistance provided by the Government of the United States (or the activity 

or activities of the recipient’s agency or any other person or entity acting on behalf 

of the recipient). 

Section 179

(a) The courts of the Federated States of Micronesia shall not exercise criminal 

jurisdiction over the Government of the United States, or its instrumentalities. 

(b) The courts of the Federated States of Micronesia shall not exercise criminal 

jurisdiction over any person if the Government of the United States provides notification to the Government of the Federated States of Micronesia that such person 

was acting on behalf of the Government of the United States, for actions taken in 

furtherance of section 221 or 224 of this amended Compact, or any other provision 

of law authorizing financial, program, or service assistance to the Federated States 

of Micronesia. 

TITLE TWO 

ECONOMIC RELATIONS 

Article I 

Grant Assistance 

Section 211 - Sector Grants 

(a) In order to assist the Government of the Federated States of Micronesia in 

its efforts to promote the economic advancement, budgetary self-reliance, and economic self-sufficiency of its people, and in recognition of the special relationship that 

exists between the Federated States of Micronesia and the United States, the Government of the United States shall provide assistance on a sector grant basis for 

a period of twenty years in the amounts set forth in section 216, commencing on 

the effective date of this Compact, as amended. Such grants shall be used for assistance in the sectors of education, health care, private sector development, the environment, public sector capacity building, and public infrastructure, or for other sectors as mutually agreed, with priorities in the education and health care sectors. 

For each year such sector grant assistance is made available, the proposed division 

of this amount among these sectors shall be certified to the Government of the 

United States by the Government of the Federated States of Micronesia and shall 

be subject to the concurrence of the Government of the United States. In such case, 

the Government of the United States shall disburse the agreed upon amounts and 

monitor the use of such sector grants in accordance with the provisions of this Article and the Agreement Concerning Procedures for the Implementation of United 

States Economic Assistance Provided in the Compact, as Amended, of Free Association Between the Government of the United States of America and the Government 

of the Federated States of Micronesia (‘‘Fiscal Procedures Agreement’’) which shall 

come into effect simultaneously with this Compact, as amended. The provision of 

any United States assistance under the Compact, as amended, the Fiscal Procedures 

Agreement, the Trust Fund Agreement, or any other subsidiary agreement to the 

Compact, as amended, shall constitute ‘‘a particular distribution . . . required by 

the terms or special nature of the assistance’’ for purposes of Article XII, section 1(b) 

of the Constitution of the Federated States of Micronesia.

(1) EDUCATION.—United States grant assistance shall be made available in 

accordance with the plan described in subsection (c) of this section to support 

and improve the educational system of the Federated States of Micronesia and 

develop the human, financial, and material resources necessary for the Government of the Federated States of Micronesia to perform these services. Emphasis 

should be placed on advancing a quality basic education system. 

(2) HEALTH.—United States grant assistance shall be made available in accordance with the plan described in subsection (c) of this section to support and 

improve the delivery of preventive, curative and environmental care and deVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00029 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
30

velop the human, financial, and material resources necessary for the Government of the Federated States of Micronesia to perform these services. 

(3) PRIVATE SECTOR DEVELOPMENT.—United States grant assistance shall be 

made available in accordance with the plan described in subsection (c) of this 

section to support the efforts of the Government of the Federated States of Micronesia to attract foreign investment and increase indigenous business activity 

by vitalizing the commercial environment, ensuring fair and equitable application of the law, promoting adherence to core labor standards, and maintaining 

progress toward privatization of state-owned and partially state-owned enterprises, and engaging in other reforms. 

(4) CAPACITY BUILDING IN THE PUBLIC SECTOR.—United States grant assistance shall be made available in accordance with the plan described in subsection (c) of this section to support the efforts of the Government of the Federated States of Micronesia to build effective, accountable and transparent national, state, and local government and other public sector institutions and systems. 

(5) ENVIRONMENT.—United States grant assistance shall be made available 

in accordance with the plan described in subsection (c) of this section to increase 

environmental protection; conserve and achieve sustainable use of natural resources; and engage in environmental infrastructure planning, design construction and operation. 

(6) PUBLIC INFRASTRUCTURE.— (i) U.S. annual grant assistance shall be made available in accordance 

with a list of specific projects included in the plan described in subsection 

(c) of this section to assist the Government of the Federated States of Micronesia in its efforts to provide adequate public infrastructure. 

(ii) INFRASTRUCTURE AND MAINTENANCE FUND.—Five percent of the annual public infrastructure grant made available under paragraph (i) of this 

subsection shall be set aside, with an equal contribution from the Government of the Federated States of Micronesia, as a contribution to an Infrastructure Maintenance Fund (IMF). Administration of the Infrastructure 

Maintenance Fund shall be governed by the Fiscal Procedures Agreement. 

(b) HUMANITARIAN ASSISTANCE.—Federated States of Micronesia Program. In 

recognition of the special development needs of the Federated States of Micronesia, 

the Government of the United States shall make available to the Government of the 

Federated States of Micronesia, on its request and to be deducted from the grant 

amount made available under subsection (a) of this section, a Humanitarian Assistance - Federated States of Micronesia (‘‘HAFSM’’) Program with emphasis on 

health, education, and infrastructure (including transportation), projects. The terms 

and conditions of the HAFSM shall be set forth in the Agreement Regarding the 

Military Use and Operating Rights of the Government of the United States in the 

Government of the Federated States of Micronesia Concluded Pursuant to Sections 

321 and 323 of the Compact of Free Association, as Amended which shall come into 

effect simultaneously with the amendments to this Compact. 

(c) DEVELOPMENT PLAN.—The Government of the Federated States of Micronesia shall prepare and maintain an official overall development plan. The plan 

shall be strategic in nature, shall be continuously reviewed and updated through the 

annual budget process, and shall make projections on a multi-year rolling basis. 

Each of the sectors named in subsection (a) of this section, or other sectors as mutually agreed, shall be accorded specific treatment in the plan. Insofar as grants funds 

are involved, the plan shall be subject to the concurrence of the Government of the 

United States. 

(d) DISASTER ASSISTANCE EMERGENCY FUND.—An amount of two hundred thousand dollars ($200,000) shall be provided annually, with an equal contribution from 

the Government of the Federated States of Micronesia, as a contribution to a ‘‘Disaster Assistance Emergency Fund (DAEF).’’ Any funds from the DAEF may be used 

only for assistance and rehabilitation resulting from disasters and emergencies. The 

funds will be accessed upon declaration by the Government of the Federated States 

of Micronesia, with the concurrence of the United States Chief of Mission to the 

Federated States of Micronesia. The Administration of the DAEF shall be governed 

by the Fiscal Procedures Agreement. 

Section 212 - Accountability. 

(a) Regulations and policies normally applicable to United States financial assistance to its state and local governments, as reflected in the Fiscal Procedures 

Agreement, shall apply to each sector grant described in section 211, and to grants 

administered under section 221 below, except as modified in the separate agreements referred to in section 231 of this Compact, as amended, or by United States 

law. The Government of the United States, after annual consultations with the FedVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00030 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
31

erated States of Micronesia, may attach reasonable terms and conditions, including 

annual performance indicators that are necessary to ensure effective use of United 

States assistance and reasonable progress toward achieving program objectives. The 

Government of the United States may seek appropriate remedies for noncompliance 

with the terms and conditions attached to the assistance, or for failure to comply 

with section 234, including withholding assistance. 

(b) The Government of the United States shall, for each fiscal year of the twenty years during which assistance is to be provided on a sector grant basis under section 211, grant the Government of the Federated States of Micronesia an amount 

equal to the lesser of (i) one half of the reasonable, properly documented cost incurred during each fiscal year to conduct the annual audit required under Article 

VIII (2) of the Fiscal Procedures Agreement or (ii) $500,000. Such amount will not 

be adjusted for inflation under section 217 or otherwise. 

Section 213 - Joint Economic Management Committee 

The Governments of the United States and the Federated States of Micronesia 

shall establish a Joint Economic Management Committee, composed of a U.S. chair, 

two other members from the Government of the United States and two members 

from the Government of the Federated States of Micronesia. The Joint Economic 

Management Committee shall meet at least once each year to review the audits and 

reports required under this Title, evaluate the progress made by the Federated 

States of Micronesia in meeting the objectives identified in its plan described in subsection (c) of section 211, with particular focus on those parts of the plan dealing 

with the sectors identified in subsection (a) of section 211, identify problems encountered, and recommend ways to increase the effectiveness of U.S. assistance made 

available under this Title. The establishment and operations of the Joint Economic 

Management Committee shall be governed by the Fiscal Procedures Agreement. 

Section 214 - Annual Report 

The Government of the Federated States of Micronesia shall report annually to 

the President of the United States on the use of United States sector grant assistance and other assistance and progress in meeting mutually agreed program and 

economic goals. The Joint Economic Management Committee shall review and comment on the report and make appropriate recommendations based thereon. 

Section 215 - Trust Fund 

(a) The United States shall contribute annually for twenty years from the effective date of this Compact, as amended, in the amounts set forth in section 216 into 

a Trust Fund established in accordance with the Agreement Between the Government of the United States of America and the Government of the Federated States 

of Micronesia Implementing Section 215 and Section 216 of the Compact, as Amended, Regarding a Trust Fund (‘‘Trust Fund Agreement’’). Upon termination of the annual financial assistance under section 211, the proceeds of the fund shall thereafter 

be used for the purposes described in section 211 or as otherwise mutually agreed. 

(b) The United States contribution into the Trust Fund described in subsection(a) of this section is conditioned on the Government of the Federated States 

of Micronesia contributing to the Trust Fund at least $30 million, prior to September 30, 2004. Any funds received by the Federated States of Micronesia under 

section 111 (d) of Public Law 99–239 (January 14, 1986), or successor provisions, 

would be contributed to the Trust Fund as a Federated States of Micronesia contribution. 

(c) The terms regarding the investment and management of funds and use of 

the income of the Trust Fund shall be set forth in the separate Trust Fund Agreement described in subsection (a) of this section. Funds derived from United States 

investment shall not be subject to Federal or state taxes in the United States or 

the Federated States of Micronesia. The Trust Fund Agreement shall also provide 

for annual reports to the Government of the United States and to the Government 

of the Federated States of Micronesia. The Trust Fund Agreement shall provide for 

appropriate distributions of trust fund proceeds to the Federated States of Micronesia and for appropriate remedies for the failure of the Federated States of Micronesia to use income of the Trust Fund for the annual grant purposes set forth in 

section 211. These remedies may include the return to the United States of the 

present market value of its contributions to the Trust Fund and the present market 

value of any undistributed income on the contributions of the United States. If this 

Compact, as amended, is terminated, the provisions of sections 451 through 453 of 

this Compact, as amended, shall govern treatment of any U.S. contributions to the 

Trust Fund or accrued interest thereon. 

Section 216 - Sector Grant Funding and Trust Fund Contributions 

The funds described in sections 211, 212(b) and 215 shall be made available as 

follows:

32

[In millions of dollars] 

Fiscal year Annual Grants 

Section 211

Audit Grant

Section 212(b) 

(amount up to) 

Trust Fund

Section 215 Total 

2004 ............................ 76.2 .5 16 92.7

2005 ............................ 76.2 .5 16 92.7

2006 ............................ 76.2 .5 16 92.7

2007 ............................ 75.4 .5 16.8 92.7

2008 ............................ 74.6 .5 17.6 92.7

2009 ............................ 73.8 .5 18.4 92.7

2010 ............................ 73 .5 19.2 92.7

2011 ............................ 72.2 .5 20 92.7

2012 ............................ 71.4 .5 20.8 92.7

2013 ............................ 70.6 .5 21.6 92.7

2014 ............................ 69.8 .5 22.4 92.7

2015 ............................ 69 .5 23.2 92.7

2016 ............................ 68.2 .5 24 92.7

2017 ............................ 67.4 .5 24.8 92.7

2018 ............................ 66.6 .5 25.6 92.7

2019 ............................ 65.8 .5 26.4 92.7

2020 ............................ 65 .5 27.2 92.7

2021 ............................ 64.2 .5 28 92.7

2022 ............................ 63.4 .5 28.8 92.7

2023 ............................ 62.6 .5 29.6 92.7

Section 217 - Inflation Adjustment 

Except for the amounts provided for audits under section 212(b), the amounts 

stated in this Title shall be adjusted for each United States Fiscal Year by the percent that equals two-thirds of the percent change in the United States Gross Domestic Product Implicit Price Deflator, or 5 percent, whichever is less in any one year, 

using the beginning of Fiscal Year 2004 as a base. 

Section 218 - Carry-Over of Unused Funds 

If in any year the funds made available by the Government of the United States 

for that year pursuant to this Article are not completely obligated by the Government of the Federated States of Micronesia, the unobligated balances shall remain 

available in addition to the funds to be provided in subsequent years. 

Article II 

Services and Program Assistance 

Section 221

(a) SERVICES.—The Government of the United States shall make available to 

the Federated States of Micronesia, in accordance with and to the extent provided 

in the Federal Programs and Services Agreement referred to in section 231, the 

services and related programs of: 

(1) the United States Weather Service; 

(2) the United States Postal Service; 

(3) the United States Federal Aviation Administration; 

(4) the United States Department of Transportation; 

(5) the Federal Deposit Insurance Corporation (for the benefit only of the 

Bank of the Federated States of Micronesia), and 

(6) the Department of Homeland Security, and the United States Agency 

for International Development, Office of Foreign Disaster Assistance. 

Upon the effective date of this Compact, as amended, the United States Departments and Agencies named or having responsibility to provide these services and 

related programs shall have the authority to implement the relevant provisions of 

the Federal Programs and Services Agreement referred to in section 231. 

(b) PROGRAMS.—

(1) With the exception of the services and programs covered by subsection 

(a) of this section, and unless the Congress of the United States provides otherwise, the Government of the United States shall make available to the Federated States of Micronesia the services and programs that were available to 

the Federated States of Micronesia on the effective date of this Compact, as 

amended, to the extent that such services and programs continue to be available to State and local governments of the United States. As set forth in the 

Fiscal Procedures Agreement, funds provided under subsection (a) of section 211 

33

will be considered to be local revenues of the Government of the Federated 

States of Micronesia when used as the local share required to obtain Federal 

programs and services. 

(2) Unless provided otherwise by U.S. law, the services and programs described in paragraph (1) of this subsection shall be extended in accordance with 

the terms of the Federal Programs and Services Agreement referred to in section 231. 

(c) The Government of the United States shall have and exercise such authority 

as is necessary to carry out its responsibilities under this Title and the separate 

agreements referred to in amended section 231, including the authority to monitor 

and administer all service and program assistance provided by the United States 

to the Federated States of Micronesia. The Federal Programs and Services Agreement referred to in amended section 231 shall also set forth the extent to which 

services and programs shall be provided to the Federated States of Micronesia. 

(d) Except as provided elsewhere in this Compact, as amended, under any separate agreement entered into under this Compact, as amended, or otherwise under 

U.S. law, all Federal domestic programs extended to or operating in the Federated 

States of Micronesia shall be subject to all applicable criteria, standards, reporting 

requirements, auditing procedures, and other rules and regulations applicable to 

such programs and services when operating in the United States. 

(e) The Government of the United States shall make available to the Federated 

States of Micronesia alternate energy development projects, studies, and conservation measures to the extent provided for the Freely Associated States in the laws 

of the United States. 

Section 222

The Government of the United States and the Government of the Federated 

States of Micronesia may agree from time to time to extend to the Federated States 

of Micronesia additional United States grant assistance, services and programs, as 

provided under the laws of the United States. Unless inconsistent with such laws, 

or otherwise specifically precluded by the Government of the United States at the 

time such additional grant assistance, services, or programs are extended, the Federal Programs and Services Agreement referred to section 231 shall apply to any 

such assistance, services or programs. 

Section 223

The Government of the Federated States of Micronesia shall make available to 

the Government of the United States at no cost such land as may be necessary for 

the operations of the services and programs provided pursuant to this Article, and 

such facilities as are provided by the Government of the Federated States of Micronesia at no cost to the Government of the United States as of the effective date of 

this Compact, as amended, or as may be mutually agreed thereafter. 

Section 224

The Government of the Federated States of Micronesia may request, from time 

to time, technical assistance from the Federal agencies and institutions of the Government of the United States, which are authorized to grant such technical assistance in accordance with its laws. If technical assistance is granted pursuant to such 

a request, the Government of the United States shall provide the technical assistance in a manner which gives priority consideration to the Federated States of Micronesia over other recipients not a part of the United States, its territories or possessions, and equivalent consideration to the Federated States of Micronesia with 

respect to other states in Free Association with the United States. Such assistance 

shall be made available on a reimbursable or non-reimbursable basis to the extent 

provided by United States law. 

Article III 

Administrative Provisions 

Section 231

The specific nature, extent and contractual arrangements of the services and 

programs provided for in section 221 of this Compact, as amended, as well as the 

legal status of agencies of the Government of the United States, their civilian employees and contractors, and the dependents of such personnel while present in the 

Federated States of Micronesia, and other arrangements in connection with the assistance, services, or programs furnished by the Government of the United States, 

are set forth in a Federal Programs and Services Agreement which shall come into 

effect simultaneously with this Compact, as amended. 

Section 232

34

The Government of the United States, in consultation with the Government of 

the Federated States of Micronesia, shall determine and implement procedures for 

the periodic audit of all grants and other assistance made under Article I of this 

Title and of all funds expended for the services and programs provided under Article 

II of this Title. Further, in accordance with the Fiscal Procedures Agreement described in subsection (a) of section 211, the Comptroller General of the United 

States shall have such powers and authorities as described in sections 102 (c) and 

110 (c) of Public Law 99–239, 99 Stat. 1777–78, and 99 Stat. 1799 (January 14, 

1986). 

Section 233

Approval of this Compact, as amended, by the Government of the United States, 

in accordance with its constitutional processes, shall constitute a pledge by the 

United States that the sums and amounts specified as sector grants in section 211 

of this Compact, as amended, shall be appropriated and paid to the Federated 

States of Micronesia for such period as those provisions of this Compact, as amended, remain in force, subject to the terms and conditions of this Title and related subsidiary agreements. 

Section 234

The Government of the Federated States of Micronesia pledges to cooperate 

with, permit, and assist if reasonably requested, designated and authorized representatives of the Government of the United States charged with investigating 

whether Compact funds, or any other assistance authorized under this Compact, as 

amended, have, or are being, used for purposes other than those set forth in this 

Compact, as amended, or its subsidiary agreements. In carrying out this investigative authority, such United States Government representatives may request that 

the Government of the Federated States of Micronesia subpoena documents and 

records and compel testimony in accordance with the laws and Constitution of the 

Federated States of Micronesia. Such assistance by the Government of the Federated States of Micronesia to the Government of the United States shall not be unreasonably withheld. The obligation of the Government of the Federated States of 

Micronesia to fulfill its pledge herein is a condition to its receiving payment of such 

funds or other assistance authorized under this Compact, as amended. The Government of the United States shall pay any reasonable costs for extraordinary services 

executed by the Government of the Federated States of Micronesia in carrying out 

the provisions of this section. 

Article IV 

Trade 

Section 241

The Federated States of Micronesia is not included in the customs territory of 

the United States. 

Section 242

The President shall proclaim the following tariff treatment for articles imported 

from the Federated States of Micronesia which shall apply during the period of effectiveness of this title: 

(a) Unless otherwise excluded, articles imported from the Federated States 

of Micronesia, subject to the limitations imposed under section 503(b) of title 

V of the Trade Act of 1974 (19 U.S.C. 2463(b)), shall be exempt from duty. 

(b) Only tuna in airtight containers provided for in heading 1604.14.22 of 

the Harmonized Tariff Schedule of the United States that is imported from the 

Federated States of Micronesia and the Republic of the Marshall Islands during 

any calendar year not to exceed 10 percent of apparent United States consumption of tuna in airtight containers during the immediately preceding calendar 

year, as reported by the National Marine Fisheries Service, shall be exempt 

from duty; but the quantity of tuna given duty-free treatment under this paragraph for any calendar year shall be counted against the aggregated quantity 

of tuna in airtight containers that is dutiable under rate column numbered 1 

of such heading 1604.14.22 for that calendar year. 

(c) The duty-free treatment provided under subsection (a) shall not apply 

to—

(1) watches, clocks, and timing apparatus provided for in Chapter 91, 

excluding heading 9113, of the Harmonized Tariff Schedule of the United 

States; 

(2) buttons (whether finished or not finished) provided for in items 

9606.21.40 and 9606.29.20 of such Schedule; 

35

(3) textile and apparel articles which are subject to textile agreements; 

and 

(4) footwear, handbags, luggage, flat goods, work gloves, and leather 

wearing apparel which were not eligible articles for purposes of title V of 

the Trade Act of 1974 (19 U.S.C. 2461, et seq.) on April 1, 1984. 

(d) If the cost or value of materials produced in the customs territory of the 

United States is included with respect to an eligible article which is a product 

of the Federated States of Micronesia, an amount not to exceed 15 percent of 

the appraised value of the article at the time it is entered that is attributable 

to such United States cost or value may be applied for duty assessment purposes toward determining the percentage referred to in section 503(a)(2) of title 

V of the Trade Act of 1974. 

Section 243

Articles imported from the Federated States of Micronesia which are not exempt from duty under subsections (a), (b), (c), and (d) of section 242 shall be subject 

to the rates of duty set forth in column numbered 1-general of the Harmonized Tariff Schedule of the United States (HTSUS). 

Section 244

(a) All products of the United States imported into the Federated States of Micronesia shall receive treatment no less favorable than that accorded like products 

of any foreign country with respect to customs duties or charges of a similar nature 

and with respect to laws and regulations relating to importation, exportation, taxation, sale, distribution, storage or use. 

(b) The provisions of subsection (a) shall not apply to advantages accorded by 

the Federated States of Micronesia by virtue of their full membership in the Pacific 

Island Countries Trade Agreement (PICTA), done on August 18, 2001, to those governments listed in Article 26 of PICTA, as of the date the Compact, as amended, 

is signed. 

(c) Prior to entering into consultations on, or concluding, a free trade agreement 

with governments not listed in Article 26 of PICTA, the Federated States of Micronesia shall consult with the United States regarding whether or how subsection (a) 

of section 244 shall be applied. 

Article V 

Finance and Taxation 

Section 251

The currency of the United States is the official circulating legal tender of the 

Federated States of Micronesia. Should the Government of the Federated States of 

Micronesia act to institute another currency, the terms of an appropriate currency 

transitional period shall be as agreed with the Government of the United States. 

Section 252

The Government of the Federated States of Micronesia may, with respect to 

United States persons, tax income derived from sources within its respective jurisdiction, property situated therein, including transfers of such property by gift or at 

death, and products consumed therein, in such manner as the Government of the 

Federated States of Micronesia deems appropriate. The determination of the source 

of any income, or the situs of any property, shall for purposes of this Compact be 

made according to the United States Internal Revenue Code. 

Section 253

A citizen of the Federated States of Micronesia, domiciled therein, shall be exempt from estate, gift, and generation-skipping transfer taxes imposed by the Government of the United States, provided that such citizen of the Federated States of 

Micronesia is neither a citizen nor a resident of the United States. 

Section 254

(a) In determining any income tax imposed by the Government of the Federated 

States of Micronesia, the Government of the Federated States of Micronesia shall 

have authority to impose tax upon income derived by a resident of the Federated 

States of Micronesia from sources without the Federated States of Micronesia, in the 

same manner and to the same extent as the Government of the Federated States 

of Micronesia imposes tax upon income derived from within its own jurisdiction. If 

the Government of the Federated States of Micronesia exercises such authority as 

provided in this subsection, any individual resident of the Federated States of Micronesia who is subject to tax by the Government of the United States on income 

which is also taxed by the Government of the Federated States of Micronesia shall 

be relieved of liability to the Government of the United States for the tax which, 

but for this subsection, would otherwise be imposed by the Government of the 

36

United States on such income. However, the relief from liability to the United 

States Government referred to in the preceding sentence means only relief in the 

form of the foreign tax credit (or deduction in lieu thereof) available with respect 

to the income taxes of a possession of the United States, and relief in the form of 

the exclusion under section 911 of the Internal Revenue Code of 1986. For purposes 

of this section, the term ‘‘resident of the Federated States of Micronesia’’ shall be 

deemed to include any person who was physically present in the Federated States 

of Micronesia for a period of 183 or more days during any taxable year. 

(b) If the Government of the Federated States of Micronesia subjects income to 

taxation substantially similar to that imposed by the Trust Territory Code in effect 

on January 1, 1980, such Government shall be deemed to have exercised the authority described in section 254(a). 

Section 255

For purposes of section 274(h)(3)(A) of the United States Internal Revenue Code 

of 1986, the term ‘‘North American Area’’ shall include the Federated States of Micronesia. 

TITLE THREE 

SECURITY AND DEFENSE RELATIONS 

Article I 

Authority and Responsibility 

Section 311

(a) The Government of the United States has full authority and responsibility 

for security and defense matters in or relating to the Federated States of Micronesia. 

(b) This authority and responsibility includes: 

(1) the obligation to defend the Federated States of Micronesia and its people from attack or threats thereof as the United States and its citizens are defended; 

(2) the option to foreclose access to or use of the Federated States of Micronesia by military personnel or for the military purposes of any third country; 

and 

(3) the option to establish and use military areas and facilities in the Federated States of Micronesia, subject to the terms of the separate agreements referred to in sections 321 and 323. 

(c) The Government of the United States confirms that it shall act in accordance 

with the principles of international law and the Charter of the United Nations in 

the exercise of this authority and responsibility. 

Section 312

Subject to the terms of any agreements negotiated in accordance with sections 

321 and 323, the Government of the United States may conduct within the lands, 

waters and airspace of the Federated States of Micronesia the activities and operations necessary for the exercise of its authority and responsibility under this Title. 

Section 313

(a) The Government of the Federated States of Micronesia shall refrain from actions that the Government of the United States determines, after appropriate consultation with that Government, to be incompatible with its authority and responsibility for security and defense matters in or relating to the Federated States of Micronesia. 

(b) The consultations referred to in this section shall be conducted expeditiously 

at senior levels of the two Governments, and the subsequent determination by the 

Government of the United States referred to in this section shall be made only at 

senior interagency levels of the Government of the United States. 

(c) The Government of the Federated States of Micronesia shall be afforded, on 

an expeditious basis, an opportunity to raise its concerns with the United States 

Secretary of State personally and the United States Secretary of Defense personally 

regarding any determination made in accordance with this section. 

Section 314

(a) Unless otherwise agreed, the Government of the United States shall not, in 

the Federated States of Micronesia:

(1) test by detonation or dispose of any nuclear weapon, nor test, dispose 

of, or discharge any toxic chemical or biological weapon; or 

37

(2) test, dispose of, or discharge any other radioactive, toxic chemical or biological materials in an amount or manner which would be hazardous to public 

health or safety. 

(b) Unless otherwise agreed, other than for transit or overflight purposes or during time of a national emergency declared by the President of the United States, 

a state of war declared by the Congress of the United States or as necessary to defend against an actual or impending armed attack on the United States, the Federated States of Micronesia or the Republic of the Marshall Islands, the Government 

of the United States shall not store in the Federated States of Micronesia or the 

Republic of the Marshall Islands any toxic chemical weapon, nor any radioactive 

materials nor any toxic chemical materials intended for weapons use. 

(c) Radioactive, toxic chemical, or biological materials not intended for weapons 

use shall not be affected by section 314(b). 

(d) No material or substance referred to in this section shall be stored in the 

Federated States of Micronesia except in an amount and manner which would not 

be hazardous to public health or safety. In determining what shall be an amount 

or manner which would be hazardous to public health or safety under this section, 

the Government of the United States shall comply with any applicable mutual 

agreement, international guidelines accepted by the Government of the United 

States, and the laws of the United States and their implementing regulations. 

(e) Any exercise of the exemption authority set forth in section 161(e) shall have 

no effect on the obligations of the Government of the United States under this section or on the application of this subsection. 

(f) The provisions of this section shall apply in the areas in which the Government of the Federated States of Micronesia exercises jurisdiction over the living resources of the seabed, subsoil or water column adjacent to its coasts. 

Section 315

The Government of the United States may invite members of the armed forces 

of other countries to use military areas and facilities in the Federated States of Micronesia, in conjunction with and under the control of United States Armed Forces. 

Use by units of the armed forces of other countries of such military areas and facilities, other than for transit and overflight purposes, shall be subject to consultation 

with and, in the case of major units, approval of the Government of the Federated 

States of Micronesia. 

Section 316

The authority and responsibility of the Government of the United States under 

this Title may not be transferred or otherwise assigned. 

Article II 

Defense Facilities and Operating Rights 

Section 321

(a) Specific arrangements for the establishment and use by the Government of 

the United States of military areas and facilities in the Federated States of Micronesia are set forth in separate agreements, which shall remain in effect in accordance with the terms of such agreements. 

(b) If, in the exercise of its authority and responsibility under this Title, the 

Government of the United States requires the use of areas within the Federated 

States of Micronesia in addition to those for which specific arrangements are concluded pursuant to section 321(a), it may request the Government of the Federated 

States of Micronesia to satisfy those requirements through leases or other arrangements. The Government of the Federated States of Micronesia shall sympathetically 

consider any such request and shall establish suitable procedures to discuss it with 

and provide a prompt response to the Government of the United States. 

(c) The Government of the United States recognizes and respects the scarcity 

and special importance of land in the Federated States of Micronesia. In making 

any requests pursuant to section 321(b), the Government of the United States shall 

follow the policy of requesting the minimum area necessary to accomplish the required security and defense purpose, of requesting only the minimum interest in 

real property necessary to support such purpose, and of requesting first to satisfy 

its requirement through public real property, where available, rather than through 

private real property. 

Section 322

The Government of the United States shall provide and maintain fixed and 

floating aids to navigation in the Federated States of Micronesia at least to the extent necessary for the exercise of its authority and responsibility under this Title. 

Section 323

38

The military operating rights of the Government of the United States and the 

legal status and contractual arrangements of the United States Armed Forces, their 

members, and associated civilians, while present in the Federated States of Micronesia are set forth in separate agreements, which shall remain in effect in accordance with the terms of such agreements. 

Article III 

Defense Treaties and International Security Agreements 

Section 331

Subject to the terms of this Compact, as amended, and its related agreements, 

the Government of the United States, exclusively, has assumed and enjoys, as to 

the Federated States of Micronesia, all obligations, responsibilities, rights and benefits of: 

(a) Any defense treaty or other international security agreement applied by the 

Government of the United States as Administering Authority of the Trust Territory 

of the Pacific Islands as of November 2, 1986. 

(b) Any defense treaty or other international security agreement to which the 

Government of the United States is or may become a party which it determines to 

be applicable in the Federated States of Micronesia. Such a determination by the 

Government of the United States shall be preceded by appropriate consultation with 

the Government of the Federated States of Micronesia. 

Article IV 

Service in Armed Forces of the United States 

Section 341

Any person entitled to the privileges set forth in Section 141 (with the exception 

of any person described in section 141(a)(5) who is not a citizen of the Federated 

States of Micronesia) shall be eligible to volunteer for service in the Armed Forces 

of the United States, but shall not be subject to involuntary induction into military 

service of the United States as long as such person has resided in the United States 

for a period of less than one year, provided that no time shall count towards this 

one year while a person admitted to the United States under the Compact, or the 

Compact, as amended, is engaged in full-time study in the United States. Any person described in section 141(a)(5) who is not a citizen of the Federated States of Micronesia shall be subject to United States laws relating to selective service. 

Section 342

The Government of the United States shall have enrolled, at any one time, at 

least one qualified student from the Federated States of Micronesia, as may be nominated by the Government of the Federated States of Micronesia, in each of: 

(a) The United States Coast Guard Academy pursuant to 14 U.S.C. 195. 

(b) The United States Merchant Marine Academy pursuant to 46 U.S.C. 

1295(b)(6), provided that the provisions of 46 U.S.C. 1295b(b)(6)(C) shall not apply 

to the enrollment of students pursuant to section 342(b) of this Compact, as amended. 

Article V 

General Provisions 

Section 351

(a) The Government of the United States and the Government of the Federated 

States of Micronesia shall continue to maintain a Joint Committee empowered to 

consider disputes arising under the implementation of this Title and its related 

agreements. 

(b) The membership of the Joint Committee shall comprise selected senior officials of the two Governments. The senior United States military commander in the 

Pacific area shall be the senior United States member of the Joint Committee. For 

the meetings of the Joint Committee, each of the two Governments may designate 

additional or alternate representatives as appropriate for the subject matter under 

consideration. 

(c) Unless otherwise mutually agreed, the Joint Committee shall meet annually 

at a time and place to be designated, after appropriate consultation, by the Government of the United States. The Joint Committee also shall meet promptly upon request of either of its members. The Joint Committee shall follow such procedures, 

including the establishment of functional subcommittees, as the members may from 

39

time to time agree. Upon notification by the Government of the United States, the 

Joint Committee of the United States and the Federated States of Micronesia shall 

meet promptly in a combined session with the Joint Committee established and 

maintained by the Government of the United States and the Republic of the Marshall Islands to consider matters within the jurisdiction of the two Joint Committees. 

(d) Unresolved issues in the Joint Committee shall be referred to the Governments for resolution, and the Government of the Federated States of Micronesia 

shall be afforded, on an expeditious basis, an opportunity to raise its concerns with 

the United States Secretary of Defense personally regarding any unresolved issue 

which threatens its continued association with the Government of the United 

States. 

Section 352

In the exercise of its authority and responsibility under Title Three, the Government of the United States shall accord due respect to the authority and responsibility of the Government of the Federated States of Micronesia under Titles One, 

Two and Four and to the responsibility of the Government of the Federated States 

of Micronesia to assure the well-being of its people. 

Section 353

(a) The Government of the United States shall not include the Government of 

the Federated States of Micronesia as a named party to a formal declaration of war, 

without that Government’s consent. 

(b) Absent such consent, this Compact, as amended, is without prejudice, on the 

ground of belligerence or the existence of a state of war, to any claims for damages 

which are advanced by the citizens, nationals or Government of the Federated 

States of Micronesia, which arise out of armed conflict subsequent to November 3, 

1986, and which are: 

(1) petitions to the Government of the United States for redress; or 

(2) claims in any manner against the government, citizens, nationals or entities of any third country. 

(c) Petitions under section 353(b)(1) shall be treated as if they were made by 

citizens of the United States. 

Section 354

(a) The Government of the United States and the Government of the Federated 

States of Micronesia are jointly committed to continue their security and defense relations, as set forth in this Title. Accordingly, it is the intention of the two countries 

that the provisions of this Title shall remain binding as long as this Compact, as 

amended, remains in effect, and thereafter as mutually agreed, unless earlier terminated by mutual agreement pursuant to section 441, or amended pursuant to Article 

III of Title Four. If at any time the Government of the United States, or the Government of the Federated States of Micronesia, acting unilaterally, terminates this 

Title, such unilateral termination shall be considered to be termination of the entire 

Compact, in which case the provisions of section 442 and 452 (in the case of termination by the Government of the United States) or sections 443 and 453 (in the case 

of termination by the Government of the Federated States of Micronesia), with the 

exception of paragraph (3) of subsection (a) of section 452 or paragraph (3) of subsection (a) of section 453, as the case may be, shall apply. 

(b) The Government of the United States recognizes, in view of the special relationship between the Government of the United States and the Government of the 

Federated States of Micronesia, and in view of the existence of the separate agreement regarding mutual security concluded with the Government of the Federated 

States of Micronesia pursuant to sections 321 and 323, that, even if this Title should 

terminate, any attack on the Federated States of Micronesia during the period in 

which such separate agreement is in effect, would constitute a threat to the peace 

and security of the entire region and a danger to the United States. In the event 

of such an attack, the Government of the United States would take action to meet 

the danger to the United States and to the Federated States of Micronesia in accordance with its constitutional processes. 

(c) As reflected in Article 21(1)(b) of the Trust Fund Agreement, the Government of the United States and the Government of the Federated States of Micronesia further recognize, in view of the special relationship between their countries, 

that even if this Title should terminate, the Government of the Federated States 

of Micronesia shall refrain from actions which the Government of the United States 

determines, after appropriate consultation with that Government, to be incompatible with its authority and responsibility for security and defense matters in or relating to the Federated States of Micronesia or the Republic of the Marshall Islands. 

40

TITLE FOUR 

GENERAL PROVISIONS 

Article I 

Approval and Effective Date 

Section 411

Pursuant to section 432 of the Compact and subject to subsection (e) of section 

461 of the Compact, as amended, the Compact, as amended, shall come into effect 

upon mutual agreement between the Government of the United States and the Government of the Federated States of Micronesia subsequent to completion of the following: 

(a) Approval by the Government of the Federated States of Micronesia in 

accordance with its constitutional processes. 

(b) Approval by the Government of the United States in accordance with 

its constitutional processes. 

Article II 

Conference and Dispute Resolution 

Section 421

The Government of the United States shall confer promptly at the request of 

the Government of the Federated States of Micronesia and that Government shall 

confer promptly at the request of the Government of the United States on matters 

relating to the provisions of this Compact, as amended, or of its related agreements. 

Section 422

In the event the Government of the United States or the Government of the 

Federated States of Micronesia, after conferring pursuant to section 421, determines 

that there is a dispute and gives written notice thereof, the two Governments shall 

make a good faith effort to resolve the dispute between themselves. 

Section 423

If a dispute between the Government of the United States and the Government 

of the Federated States of Micronesia cannot be resolved within 90 days of written 

notification in the manner provided in section 422, either party to the dispute may 

refer it to arbitration in accordance with section 424. 

Section 424

Should a dispute be referred to arbitration as provided for in section 423, an 

Arbitration Board shall be established for the purpose of hearing the dispute and 

rendering a decision which shall be binding upon the two parties to the dispute unless the two parties mutually agree that the decision shall be advisory. Arbitration 

shall occur according to the following terms: 

(a) An Arbitration Board shall consist of a Chairman and two other members, each of whom shall be a citizen of a party to the dispute. Each of the two 

Governments which is a party to the dispute shall appoint one member to the 

Arbitration Board. If either party to the dispute does not fulfill the appointment 

requirements of this section within 30 days of referral of the dispute to arbitration pursuant to section 423, its member on the Arbitration Board shall be selected from its own standing list by the other party to the dispute. Each Government shall maintain a standing list of 10 candidates. The parties to the dispute shall jointly appoint a Chairman within 15 days after selection of the other 

members of the Arbitration Board. Failing agreement on a Chairman, the 

Chairman shall be chosen by lot from the standing lists of the parties to the 

dispute within 5 days after such failure. 

(b) Unless otherwise provided in this Compact, as amended, or its related 

agreements, the Arbitration Board shall have jurisdiction to hear and render its 

final determination on all disputes arising exclusively under Articles I, II, III, 

IV and V of Title One, Title Two, Title Four, and their related agreements. 

(c) Each member of the Arbitration Board shall have one vote. Each decision of the Arbitration Board shall be reached by majority vote. 

(d) In determining any legal issue, the Arbitration Board may have reference 

to international law and, in such reference, shall apply as guidelines the provisions 

set forth in Article 38 of the Statute of the International Court of Justice. 

(e) The Arbitration Board shall adopt such rules for its proceedings as it may 

deem appropriate and necessary, but such rules shall not contravene the provisions 

of this Compact, as amended. Unless the parties provide otherwise by mutual agreement, the Arbitration Board shall endeavor to render its decision within 30 days 

41

after the conclusion of arguments. The Arbitration Board shall make findings of fact 

and conclusions of law and its members may issue dissenting or individual opinions. 

Except as may be otherwise decided by the Arbitration Board, one-half of all costs 

of the arbitration shall be borne by the Government of the United States and the 

remainder shall be borne by the Government of the Federated States of Micronesia. 

Article III 

Amendment 

Section 431

The provisions of this Compact, as amended, may be further amended by mutual agreement of the Government of the United States and the Government of the 

Federated States of Micronesia, in accordance with their respective constitutional 

processes. 

Article IV 

Termination 

Section 441

This Compact, as amended, may be terminated by mutual agreement of the 

Government of the Federated States of Micronesia and the Government of the 

United States, in accordance with their respective constitutional processes. Such 

mutual termination of this Compact, as amended, shall be without prejudice to the 

continued application of section 451 of this Compact, as amended, and the provisions of the Compact, as amended, set forth therein. 

Section 442

Subject to section 452, this Compact, as amended, may be terminated by the 

Government of the United States in accordance with its constitutional processes. 

Such termination shall be effective on the date specified in the notice of termination 

by the Government of the United States but not earlier than six months following 

delivery of such notice. The time specified in the notice of termination may be extended. Such termination of this Compact, as amended, shall be without prejudice 

to the continued application of section 452 of this Compact, as amended, and the 

provisions of the Compact, as amended, set forth therein. 

Section 443

This Compact, as amended, shall be terminated by the Government of the Federated States of Micronesia, pursuant to its constitutional processes, subject to section 453 if the people represented by that Government vote in a plebiscite to terminate the Compact, as amended, or by another process permitted by the FSM constitution and mutually agreed between the Governments of the United States and 

the Federated States of Micronesia. The Government of the Federated States of Micronesia shall notify the Government of the United States of its intention to call 

such a plebiscite, or to pursue another mutually agreed and constitutional process, 

which plebiscite or process shall take place not earlier than three months after delivery of such notice. The plebiscite or other process shall be administered by the 

Government of the Federated States of Micronesia in accordance with its constitutional and legislative processes. If a majority of the valid ballots cast in the plebiscite or other process favors termination, the Government of the Federated States 

of Micronesia shall, upon certification of the results of the plebiscite or other process, give notice of termination to the Government of the United States, such termination to be effective on the date specified in such notice but not earlier than three 

months following the date of delivery of such notice. The time specified in the notice 

of termination may be extended. 

Article V 

Survivability 

Section 451

(a) Should termination occur pursuant to section 441, economic and other assistance by the Government of the United States shall continue only if and as mutually 

agreed by the Governments of the United States and the Federated States of Micronesia, and in accordance with the parties’ respective constitutional processes. 

(b) In view of the special relationship of the United States and the Federated 

States of Micronesia, as reflected in subsections (b) and (c) of section 354 of this 

Compact, as amended, and the separate agreement entered into consistent with 

those subsections, if termination occurs pursuant to section 441 prior to the twenVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00041 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
42

tieth anniversary of the effective date of this Compact, as amended, the United 

States shall continue to make contributions to the Trust Fund described in section 

215 of this Compact, as amended. 

(c) In view of the special relationship of the United States and the Federated 

States of Micronesia described in subsection (b) of this section, if termination occurs 

pursuant to section 441 following the twentieth anniversary of the effective date of 

this Compact, as amended, the Federated States of Micronesia shall be entitled to 

receive proceeds from the Trust Fund described in section 215 of this Compact, as 

amended, in the manner described in those provisions and the Trust Fund Agreement governing the distribution of such proceeds. 

Section 452

(a) Should termination occur pursuant to section 442 prior to the twentieth anniversary of the effective date of this Compact, as amended, the following provisions 

of this Compact, as amended, shall remain in full force and effect until the twentieth anniversary of the effective date of this Compact, as amended, and thereafter 

as mutually agreed: 

(1) Article VI and sections 172, 173, 176 and 177 of Title One; 

(2) Sections 232 and 234 of Title Two; 

(3) Title Three; and 

(4) Articles II, III, V and VI of Title Four. 

(b) Should termination occur pursuant to section 442 before the twentieth anniversary of the effective date of the Compact, as amended: 

(1) Except as provided in paragraph (2) of this subsection and subsection 

(c) of this section, economic and other assistance by the United States shall continue only if and as mutually agreed by the Governments of the United States 

and the Federated States of Micronesia. 

(2) In view of the special relationship of the United States and the Federated States of Micronesia, as reflected in subsections (b) and (c) of section 354 

of this Compact, as amended, and the separate agreement regarding mutual security, and the Trust Fund Agreement, the United States shall continue to 

make contributions to the Trust Fund described in section 215 of this Compact, 

as amended, in the manner described in the Trust Fund Agreement. 

(c) In view of the special relationship of the United States and the Federated 

States of Micronesia, as reflected in subsections 354(b) and (c) of this Compact, as 

amended, and the separate agreement regarding mutual security, and the Trust 

Fund Agreement, if termination occurs pursuant to section 442 following the twentieth anniversary of the effective date of this Compact, as amended, the Federated 

States of Micronesia shall continue to be eligible to receive proceeds from the Trust 

Fund described in section 215 of this Compact, as amended, in the manner described in those provisions and the Trust Fund Agreement. 

Section 453

(a) Should termination occur pursuant to section 443 prior to the twentieth anniversary of the effective date of this Compact, as amended, the following provisions 

of this Compact, as amended, shall remain in full force and effect until the twentieth anniversary of the effective date of this Compact, as amended, and thereafter 

as mutually agreed: 

(1) Article VI and sections 172, 173, 176 and 177 of Title One; 

(2) Sections 232 and 234 of Title Two; 

(3) Title Three; and 

(4) Articles II, III, V and VI of Title Four. 

(b) Upon receipt of notice of termination pursuant to section 443, the Government of the United States and the Government of the Federated States of Micronesia shall promptly consult with regard to their future relationship. Except as provided in subsection (c) and (d) of this section, these consultations shall determine 

the level of economic and other assistance, if any, which the Government of the 

United States shall provide to the Government of the Federated States of Micronesia for the period ending on the twentieth anniversary of the effective date of this 

Compact, as amended, and for any period thereafter, if mutually agreed. 

(c) In view of the special relationship of the United States and the Federated 

States of Micronesia, as reflected in subsections 354(b) and (c) of this Compact, as 

amended, and the separate agreement regarding mutual security, and the Trust 

Fund Agreement, if termination occurs pursuant to section 443 prior to the twentieth anniversary of the effective date of this Compact, as amended, the United 

States shall continue to make contributions to the Trust Fund described in section 

215 of this Compact, as amended, in the manner described in the Trust Fund Agreement. 

(d) In view of the special relationship of the United States and the Federated 

States of Micronesia, as reflected in subsections 354(b) and (c) of this Compact, as 

43

amended, and the separate agreement regarding mutual security, and the Trust 

Fund Agreement, if termination occurs pursuant to section 443 following the twentieth anniversary of the effective date of this Compact, as amended, the Federated 

States of Micronesia shall continue to be eligible to receive proceeds from the Trust 

Fund described in section 215 of this Compact, as amended, in the manner described in those provisions and the Trust Fund Agreement. 

Section 454

Notwithstanding any other provision of this Compact, as amended: 

(a) The Government of the United States reaffirms its continuing interest 

in promoting the economic advancement and budgetary self-reliance of the people of the Federated States of Micronesia. 

(b) The separate agreements referred to in Article II of Title Three shall 

remain in effect in accordance with their terms. 

Article VI 

Definition of Terms 

Section 461

For the purpose of this Compact, as amended, only, and without prejudice to 

the views of the Government of the United States or the Government of the Federated States of Micronesia as to the nature and extent of the jurisdiction of either 

of them under international law, the following terms shall have the following meanings: 

(a) ‘‘Trust Territory of the Pacific Islands’’ means the area established in 

the Trusteeship Agreement consisting of the former administrative districts of 

Kosrae, Yap, Ponape, the Marshall Islands and Truk as described in Title One, 

Trust Territory Code, section 1, in force on January 1, 1979. This term does not 

include the area of Palau or the Northern Mariana Islands. 

(b) ‘‘Trusteeship Agreement’’ means the agreement setting forth the terms 

of trusteeship for the Trust Territory of the Pacific Islands, approved by the Security Council of the United Nations April 2, 1947, and by the United States 

July 18, 1947, entered into force July 18, 1947, 61 Stat. 3301, T.I.A.S. 1665, 8 

U.N.T.S. 189. 

(c) ‘‘The Federated States of Micronesia’’ and ‘‘the Republic of the Marshall 

Islands’’ are used in a geographic sense and include the land and water areas 

to the outer limits of the territorial sea and the air space above such areas as 

now or hereafter recognized by the Government of the United States. 

(d) ‘‘Compact’’ means the Compact of Free Association Between the United 

States and the Federated States of Micronesia and the Marshall Islands, that 

was approved by the United States Congress in section 201 of Public Law 99–

239 (Jan. 14, 1986) and went into effect with respect to the Federated States 

of Micronesia on November 3, 1986. 

(e) ‘‘Compact, as amended’’ means the Compact of Free Association Between 

the United States and the Federated States of Micronesia, as amended. The effective date of the Compact, as amended, shall be on a date to be determined 

by the President of the United States, and agreed to by the Government of the 

Federated States of Micronesia, following formal approval of the Compact, as 

amended, in accordance with section 411 of this Compact, as amended. 

(f) ‘‘Government of the Federated States of Micronesia’’ means the Government established and organized by the Constitution of the Federated States of 

Micronesia including all the political subdivisions and entities comprising that 

Government. 

(g) ‘‘Government of the Republic of the Marshall Islands’’ means the Government established and organized by the Constitution of the Republic of the 

Marshall Islands including all the political subdivisions and entities comprising 

that Government. 

(h) The following terms shall be defined consistent with the 1998 Edition 

of the Radio Regulations of the International Telecommunications Union as follows: 

(1) ‘‘Radiocommunication’’ means telecommunication by means of radio 

waves. 

(2) ‘‘Station’’ means one or more transmitters or receivers or a combination of transmitters and receivers, including the accessory equipment, necessary at one location for carrying on a radiocommunication service, or the 

radio astronomy service. 

(3) ‘‘Broadcasting Service’’ means a radiocommunication service in 

which the transmissions are intended for direct reception by the general 

44

public. This service may include sound transmissions, television transmissions or other types of transmission. 

(4) ‘‘Broadcasting Station’’ means a station in the broadcasting service. 

(5) ‘‘Assignment (of a radio frequency or radio frequency channel)’’ 

means an authorization given by an administration for a radio station to 

use a radio frequency or radio frequency channel under specified conditions. 

(6) ‘‘Telecommunication’’ means any transmission, emission or reception 

of signs, signals, writings, images and sounds or intelligence of any nature 

by wire, radio, optical or other electromagnetic systems. 

(i) ‘‘Military Areas and Facilities’’ means those areas and facilities in the 

Federated States of Micronesia reserved or acquired by the Government of the 

Federated States of Micronesia for use by the Government of the United States, 

as set forth in the separate agreements referred to in section 321. 

(j) ‘‘Tariff Schedules of the United States’’ means the Tariff Schedules of the 

United States as amended from time to time and as promulgated pursuant to 

United States law and includes the Tariff Schedules of the United States Annotated (TSUSA), as amended. 

(k) ‘‘Vienna Convention on Diplomatic Relations’’ means the Vienna Convention on Diplomatic Relations, done April 18, 1961, 23 U.S.T. 3227, T.I.A.S. 

7502, 500 U.N.T.S. 95. 

Section 462

(a) The Government of the United States and the Government of the Federated 

States of Micronesia previously have concluded agreements pursuant to the Compact, which shall remain in effect and shall survive in accordance with their terms, 

as follows: 

(1) Agreement Concluded Pursuant to Section 234 of the Compact; 

(2) Agreement Between the Government of the United States and the Government of the Federated States of Micronesia Regarding Friendship, Cooperation and Mutual Security Concluded Pursuant to Sections 321 and 323 of the 

Compact of Free Association; and 

(3) Agreement between the Government of the United States of America 

and the Federated States of Micronesia Regarding Aspects of the Marine Sovereignty and Jurisdiction of the Federated States of Micronesia. 

(b) The Government of the United States and the Government of the Federated 

States of Micronesia shall conclude prior to the date of submission of this Compact, 

as amended, to the legislatures of the two countries, the following related agreements which shall come into effect on the effective date of this Compact, as amended, and shall survive in accordance with their terms, as follows: 

(1) Federal Programs and Services Agreement Between the Government of 

the United States of America and the Government of the Federated States of 

Micronesia Concluded Pursuant to Article III of Title One, Article II of Title 

Two (including Section 222), and Section 231 of the Compact of Free Association, as amended which includes: 

(i) Postal Services and Related Programs; 

(ii) Weather Services and Related Programs; 

(iii) Civil Aviation Safety Service and Related Programs; 

(iv) Civil Aviation Economic Services and Related Programs; 

(v) United States Disaster Preparedness and Response Services and Related Programs; 

(vi) Federal Deposit Insurance Corporation Services and Related Programs; and 

(vii) Telecommunications Services and Related Programs. 

(2) Agreement Between the Government of the United States of America 

and the Government of the Federated States of Micronesia on Extradition, Mutual Assistance in Law Enforcement Matters and Penal Sanctions Concluded 

Pursuant to Section 175(a) of the Compact of Free Association, as amended; 

(3) Agreement Between the Government of the United States of America 

and the Government of the Federated States of Micronesia on Labor Recruitment Concluded Pursuant to Section 175(b) of the Compact of Free Association, 

as amended; 

(4) Agreement Concerning Procedures for the Implementation of United 

States Economic Assistance Provided in the Compact of Free Association, as 

Amended, of Free Association Between the Government of the United States of 

America and Government of the Federated States of Micronesia; 

(5) Agreement Between the Government of the United States of America 

and the Government of the Federated States of Micronesia Implementing Section 215 and Section 216 of the Compact, as Amended, Regarding a Trust Fund; 

45

(6) Agreement Regarding the Military Use and Operating Rights of the 

Government of the United States in the Federated States of Micronesia Concluded Pursuant to Sections 211(b), 321 and 323 of the Compact of Free Association, as Amended; and the 

(7) Status of Forces Agreement Between the Government of the United 

States of America and the Government of the Federated States of Micronesia 

Concluded Pursuant to Section 323 of the Compact of Free Association, as 

Amended. 

Section 463

(a) Except as set forth in subsection (b) of this section, any reference in this 

Compact, as amended, to a provision of the United States Code or the Statutes at 

Large of the United States constitutes the incorporation of the language of such provision into this Compact, as amended, as such provision was in force on the effective 

date of this Compact, as amended. 

(b) Any reference in Articles IV and Article VI of Title One and Sections 174, 

175, 178 and 342 to a provision of the United States Code or the Statutes at Large 

of the United States or to the Privacy Act, the Freedom of Information Act, the Administrative Procedure Act or the Immigration and Nationality Act constitutes the 

incorporation of the language of such provision into this Compact, as amended, as 

such provision was in force on the effective date of this Compact, as amended, or 

as it may be amended thereafter on a non-discriminatory basis according to the constitutional processes of the United States. 

Article VII 

Concluding Provisions 

Section 471

Both the Government of the United States and the Government of the Federated States of Micronesia shall take all necessary steps, of a general or particular 

character, to ensure, no later than the entry into force date of this Compact, as 

amended, the conformity of its laws, regulations and administrative procedures with 

the provisions of this Compact, as amended, or in the case of subsection (d) of section 141, as soon as reasonably possible thereafter. 

Section 472

This Compact, as amended, may be accepted, by signature or otherwise, by the 

Government of the United States and the Government of the Federated States of 

Micronesia. 

IN WITNESS WHEREOF, the undersigned, duly authorized, have signed this 

Compact of Free Association, as amended, which shall enter into force upon the exchange of diplomatic notes by which the Government of the United States of America and the Government of the Federated States of Micronesia inform each other 

about the fulfillment of their respective requirements for entry into force. 

DONE at Pohnpei, Federated States of Micronesia, in duplicate, this fourteenth 

(14) day of May, 2003, each text being equally authentic.

Signed (May 14, 2003) Signed (May 14, 2003) 

For the Government of the For the Government of the 

United States of America: Federated States of 

Micronesia:

(b) COMPACT OF FREE ASSOCIATION, AS AMENDED, BETWEEN THE GOVERNMENT

OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF THE

MARSHALL ISLANDS

PREAMBLE 

THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE 

GOVERNMENT OF THE REPUBLIC OF THE MARSHALL ISLANDS 

Affirming that their Governments and their relationship as Governments are 

founded upon respect for human rights and fundamental freedoms for all, and that 

the people of the Republic of the Marshall Islands have the right to enjoy self-government; and 

Affirming the common interests of the United States of America and the Republic of the Marshall Islands in creating and maintaining their close and mutually 

beneficial relationship through the free and voluntary association of their respective 

Governments; and 

Affirming the interest of the Government of the United States in promoting the 

economic advancement and budgetary self-reliance of the Republic of the Marshall 

Islands; and 

46

Recognizing that their relationship until the entry into force on October 21, 

1986 of the Compact was based upon the International Trusteeship System of the 

United Nations Charter, and in particular Article 76 of the Charter; and that pursuant to Article 76 of the Charter, the people of the Republic of the Marshall Islands 

have progressively developed their institutions of self-government, and that in the 

exercise of their sovereign right to self-determination they, through their freely-expressed wishes, have adopted a Constitution appropriate to their particular circumstances; and 

Recognizing that the Compact reflected their common desire to terminate the 

Trusteeship and establish a government-to-government relationship which was in 

accordance with the new political status based on the freely expressed wishes of the 

people of the Republic of the Marshall Islands and appropriate to their particular 

circumstances; and 

Recognizing that the people of the Republic of the Marshall Islands have and 

retain their sovereignty and their sovereign right to self-determination and the inherent right to adopt and amend their own Constitution and form of government 

and that the approval of the entry of the Government of the Republic of the Marshall Islands into the Compact by the people of the Republic of the Marshall Islands 

constituted an exercise of their sovereign right to self-determination; and 

Recognizing the common desire of the people of the United States and the people of the Republic of the Marshall Islands to maintain their close government-togovernment relationship, the United States and the Republic of the Marshall Islands:

NOW, THEREFORE, MUTUALLY AGREE to continue and strengthen their relationship of free association by amending the Compact, which continues to provide 

a full measure of self-government for the people of the Republic of the Marshall Islands; and 

FURTHER AGREE that the relationship of free association derives from and 

is as set forth in this Compact, as amended, by the Governments of the United 

States and the Republic of the Marshall Islands; and that, during such relationship 

of free association, the respective rights and responsibilities of the Government of 

the United States and the Government of the Republic of the Marshall Islands in 

regard to this relationship of free association derive from and are as set forth in 

this Compact, as amended. 

TITLE ONE 

GOVERNMENTAL RELATIONS 

Article I 

Self-Government 

Section 111

The people of the Republic of the Marshall Islands, acting through the Government established under their Constitution, are self-governing. 

Article II 

Foreign Affairs 

Section 121

(a) The Government of the Republic of the Marshall Islands has the capacity 

to conduct foreign affairs and shall do so in its own name and right, except as otherwise provided in this Compact, as amended. 

(b) The foreign affairs capacity of the Government of the Republic of the Marshall Islands includes: 

(1) the conduct of foreign affairs relating to law of the sea and marine resources matters, including the harvesting, conservation, exploration or exploitation of living and non-living resources from the sea, seabed or subsoil to the 

full extent recognized under international law; 

(2) the conduct of its commercial, diplomatic, consular, economic, trade, 

banking, postal, civil aviation, communications, and cultural relations, including 

negotiations for the receipt of developmental loans and grants and the conclusion of arrangements with other governments and international and intergovernmental organizations, including any matters specially benefiting its individual citizens. 

(c) The Government of the United States recognizes that the Government of the 

Republic of the Marshall Islands has the capacity to enter into, in its own name 

47

and right, treaties and other international agreements with governments and regional and international organizations. 

(d) In the conduct of its foreign affairs, the Government of the Republic of the 

Marshall Islands confirms that it shall act in accordance with principles of international law and shall settle its international disputes by peaceful means. 

Section 122

The Government of the United States shall support applications by the Government of the Republic of the Marshall Islands for membership or other participation 

in regional or international organizations as may be mutually agreed. 

Section 123

(a) In recognition of the authority and responsibility of the Government of the 

United States under Title Three, the Government of the Republic of the Marshall 

Islands shall consult, in the conduct of its foreign affairs, with the Government of 

the United States. 

(b) In recognition of the foreign affairs capacity of the Government of the Republic of the Marshall Islands, the Government of the United States, in the conduct 

of its foreign affairs, shall consult with the Government of the Republic of the Marshall Islands on matters that the Government of the United States regards as relating to or affecting the Government of the Republic of the Marshall Islands. 

Section 124

The Government of the United States may assist or act on behalf of the Government of the Republic of the Marshall Islands in the area of foreign affairs as may 

be requested and mutually agreed from time to time. The Government of the United 

States shall not be responsible to third parties for the actions of the Government 

of the Republic of the Marshall Islands undertaken with the assistance or through 

the agency of the Government of the United States pursuant to this section unless 

expressly agreed. 

Section 125

The Government of the United States shall not be responsible for nor obligated 

by any actions taken by the Government of the Republic of the Marshall Islands 

in the area of foreign affairs, except as may from time to time be expressly agreed. 

Section 126

At the request of the Government of the Republic of the Marshall Islands and 

subject to the consent of the receiving state, the Government of the United States 

shall extend consular assistance on the same basis as for citizens of the United 

States to citizens of the Republic of the Marshall Islands for travel outside the Republic of the Marshall Islands, the United States and its territories and possessions. 

Section 127

Except as otherwise provided in this Compact, as amended, or its related agreements, all obligations, responsibilities, rights and benefits of the Government of the 

United States as Administering Authority which resulted from the application pursuant to the Trusteeship Agreement of any treaty or other international agreement 

to the Trust Territory of the Pacific Islands on October 20, 1986, are, as of that date, 

no longer assumed and enjoyed by the Government of the United States. 

Article III 

Communications 

Section 131

(a) The Government of the Republic of the Marshall Islands has full authority 

and responsibility to regulate its domestic and foreign communications, and the 

Government of the United States shall provide communications assistance as mutually agreed. 

(b) The Government of the Republic of the Marshall Islands has elected to undertake all functions previously performed by the Government of the United States 

with respect to domestic and foreign communications, except for those functions set 

forth in a separate agreement entered into pursuant to this section of the Compact, 

as amended. 

Section 132

The Government of the Republic of the Marshall Islands shall permit the Government of the United States to operate telecommunications services in the Republic 

of the Marshall Islands to the extent necessary to fulfill the obligations of the Government of the United States under this Compact, as amended, in accordance with 

the terms of separate agreements entered into pursuant to this section of the Compact, as amended. 

48

Article IV 

Immigration 

Section 141

(a) In furtherance of the special and unique relationship that exists between the 

United States and the Republic of the Marshall Islands, under the Compact, as 

amended, any person in the following categories may be admitted to lawfully engage 

in occupations, and establish residence as a nonimmigrant in the United States and 

its territories and possessions (the ‘‘United States’’) without regard to paragraphs 

(5) or (7)(B)(i)(II) of section 212(a) of the Immigration and Nationality Act, as 

amended, 8 U.S.C. 1182(a)(5) or (7)(B)(i)(II): 

(1) a person who, on October 21, 1986, was a citizen of the Trust Territory 

of the Pacific Islands, as defined in Title 53 of the Trust Territory Code in force 

on January 1, 1979, and has become and remains a citizen of the Republic of 

the Marshall Islands; 

(2) a person who acquires the citizenship of the Republic of the Marshall 

Islands at birth, on or after the effective date of the Constitution of the Republic 

of the Marshall Islands; 

(3) an immediate relative of a person referred to in paragraphs (1) or (2) 

of this section, provided that such immediate relative is a naturalized citizen 

of the Republic of the Marshall Islands who has been an actual resident there 

for not less than five years after attaining such naturalization and who holds 

a certificate of actual residence, and further provided, that, in the case of a 

spouse, such spouse has been married to the person referred to in paragraph 

(1) or (2) of this section for at least five years, and further provided, that the 

Government of the United States is satisfied that such naturalized citizen meets 

the requirement of subsection (b) of section 104 of Public Law 99–239 as it was 

in effect on the day prior to the effective date of this Compact, as amended; 

(4) a naturalized citizen of the Republic of the Marshall Islands who was 

an actual resident there for not less than five years after attaining such naturalization and who satisfied these requirements as of April 30, 2003, who continues to be an actual resident and holds a certificate of actual residence, and 

whose name is included in a list furnished by the Government of the Republic 

of the Marshall Islands to the Government of the United States no later than 

the effective date of the Compact, as amended, in form and content acceptable 

to the Government of the United States, provided, that the Government of the 

United States is satisfied that such naturalized citizen meets the requirement 

of subsection (b) of section 104 of Public Law 99–239 as it was in effect on the 

day prior to the effective date of this Compact, as amended; or 

(5) an immediate relative of a citizen of the Republic of the Marshall Islands, regardless of the immediate relative’s country of citizenship or period of 

residence in the Republic of the Marshall Islands, if the citizen of the Republic 

of the Marshall Islands is serving on active duty in any branch of the United 

States Armed Forces, or in the active reserves. 

(b) Notwithstanding subsection (a) of this section, a person who is coming to the 

United States pursuant to an adoption outside the United States, or for the purpose 

of adoption in the United States, is ineligible for admission under the Compact and 

the Compact, as amended. This subsection shall apply to any person who is or was 

an applicant for admission to the United States on or after March 1, 2003, including 

any applicant for admission in removal proceedings (including appellate proceedings) on or after March 1, 2003, regardless of the date such proceedings were 

commenced. This subsection shall have no effect on the ability of the Government 

of the United States or any United States State or local government to commence 

or otherwise take any action against any person or entity who has violated any law 

relating to the adoption of any person. 

(c) Notwithstanding subsection (a) of this section, no person who has been or 

is granted citizenship in the Republic of the Marshall Islands, or has been or is 

issued a Republic of the Marshall Islands passport pursuant to any investment, 

passport sale, or similar program has been or shall be eligible for admission to the 

United States under the Compact or the Compact, as amended. 

(d) A person admitted to the United States under the Compact, or the Compact, 

as amended, shall be considered to have the permission of the Government of the 

United States to accept employment in the United States. An unexpired Republic 

of the Marshall Islands passport with unexpired documentation issued by the Government of the United States evidencing admission under the Compact or the Compact, as amended, shall be considered to be documentation establishing identity and 

employment authorization under section 274A(b)(1)(B) of the Immigration and NaVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00048 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
49

tionality Act, as amended, 8 U.S.C. 1324a(b)(1)(B). The Government of the United 

States will take reasonable and appropriate steps to implement and publicize this 

provision, and the Government of the Republic of the Marshall Islands will also take 

reasonable and appropriate steps to publicize this provision. 

(e) For purposes of the Compact and the Compact, as amended, 

(1) the term ‘‘residence’’ with respect to a person means the person’s principal, actual dwelling place in fact, without regard to intent, as provided in section 101(a)(33) of the Immigration and Nationality Act, as amended, 8 U.S.C. 

1101(a)(33), and variations of the term ‘‘residence,’’ including ‘‘resident’’ and ‘‘reside,’’ shall be similarly construed; 

(2) the term ‘‘actual residence’’ means physical presence in the Republic of 

the Marshall Islands during eighty-five percent of the five-year period of residency required by section 141(a)(3) and (4); 

(3) the term ‘‘certificate of actual residence’’ means a certificate issued to 

a naturalized citizen by the Government of the Republic of the Marshall Islands 

stating that the citizen has complied with the actual residence requirement of 

section 141(a)(3) or (4); 

(4) the term ‘‘nonimmigrant’’ means an alien who is not an ‘‘immigrant’’ as 

defined in section 101(a)(15) of such Act, 8 U.S.C. 1101(a)(15); and 

(5) the term ‘‘immediate relative’’ means a spouse, or unmarried son or unmarried daughter less than 21 years of age. 

(f) The Immigration and Nationality Act, as amended, shall apply to any person 

admitted or seeking admission to the United States (other than a United States possession or territory where such Act does not apply) under the Compact or the Compact, as amended, and nothing in the Compact or the Compact, as amended, shall 

be construed to limit, preclude, or modify the applicability of, with respect to such 

person: 

(1) any ground of inadmissibility or deportability under such Act (except 

sections 212(a)(5) and 212(a)(7)(B)(i)(II) of such Act, as provided in subsection 

(a) of this section), and any defense thereto, provided that, section 237(a)(5) of 

such Act shall be construed and applied as if it reads as follows: ‘‘any alien who 

has been admitted under the Compact, or the Compact, as amended, who cannot show that he or she has sufficient means of support in the United States, 

is deportable;’’

(2) the authority of the Government of the United States under section 

214(a)(1) of such Act to provide that admission as a nonimmigrant shall be for 

such time and under such conditions as the Government of the United States 

may by regulations prescribe; 

(3) except for the treatment of certain documentation for purposes of section 

274A(b)(1)(B) of such Act as provided by subsection (d) of this section of the 

Compact, as amended, any requirement under section 274A, including but not 

limited to section 274A(b)(1)(E); 

(4) section 643 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, Public Law 104–208, and actions taken pursuant to section 

643; and 

(5) the authority of the Government of the United States otherwise to administer and enforce the Immigration and Nationality Act, as amended, or other 

United States law. 

(g) Any authority possessed by the Government of the United States under this 

section of the Compact or the Compact, as amended, may also be exercised by the 

Government of a territory or possession of the United States where the Immigration 

and Nationality Act, as amended, does not apply, to the extent such exercise of authority is lawful under a statute or regulation of such territory or possession that 

is authorized by the laws of the United States. 

(h) Subsection (a) of this section does not confer on a citizen of the Republic of 

the Marshall Islands the right to establish the residence necessary for naturalization under the Immigration and Nationality Act, as amended, or to petition for benefits for alien relatives under that Act. Subsection (a) of this section, however, shall 

not prevent a citizen of the Republic of the Marshall Islands from otherwise acquiring such rights or lawful permanent resident alien status in the United States. 

Section 142

(a) Any citizen or national of the United States may be admitted to lawfully engage in occupations, and reside in the Republic of the Marshall Islands, subject to 

the rights of the Government of the Republic of the Marshall Islands to deny entry 

to or deport any such citizen or national as an undesirable alien. Any determination 

of inadmissibility or deportability shall be based on reasonable statutory grounds 

and shall be subject to appropriate administrative and judicial review within the Republic of the Marshall Islands. If a citizen or national of the United States is a 

50

spouse of a citizen of the Republic of the Marshall Islands, the Government of the 

Republic of the Marshall Islands shall allow the United States citizen spouse to establish residence. Should the Republic of the Marshall Islands citizen spouse predecease the United States citizen spouse during the marriage, the Government of 

the Republic of the Marshall Islands shall allow the United States citizen spouse 

to continue to reside in the Republic of the Marshall Islands. 

(b) In enacting any laws or imposing any requirements with respect to citizens 

and nationals of the United States entering the Republic of the Marshall Islands 

under subsection (a) of this section, including any grounds of inadmissibility or deportability, the Government of the Republic of the Marshall Islands shall accord to 

such citizens and nationals of the United States treatment no less favorable than 

that accorded to citizens of other countries. 

(c) Consistent with subsection (a) of this section, with respect to citizens and 

nationals of the United States seeking to engage in employment or invest in the Republic of the Marshall Islands, the Government of the Republic of the Marshall Islands shall adopt immigration-related procedures no less favorable than those 

adopted by the Government of the United States with respect to citizens of the Republic of the Marshall Islands seeking employment in the United States. 

Section 143

Any person who relinquishes, or otherwise loses, his United States nationality 

or citizenship, or his Republic of the Marshall Islands citizenship, shall be ineligible 

to receive the privileges set forth in sections 141 and 142. Any such person may 

apply for admission to the United States or the Republic of the Marshall Islands, 

as the case may be, in accordance with any other applicable laws of the United 

States or the Republic of the Marshall Islands relating to immigration of aliens from 

other countries. The laws of the Republic of the Marshall Islands or the United

States, as the case may be, shall dictate the terms and conditions of any such person’s stay. 

Article V 

Representation 

Section 151

Relations between the Government of the United States and the Government 

of the Republic of the Marshall Islands shall be conducted in accordance with the 

Vienna Convention on Diplomatic Relations. In addition to diplomatic missions and 

representation, the Governments may establish and maintain other offices and designate other representatives on terms and in locations as may be mutually agreed. 

Section 152

(a) Any citizen or national of the United States who, without authority of the 

United States, acts as the agent of the Government of the Republic of the Marshall 

Islands with regard to matters specified in the provisions of the Foreign Agents Registration Act of 1938, as amended (22 U.S.C. 611 et seq.), that apply with respect 

to an agent of a foreign principal shall be subject to the requirements of such Act. 

Failure to comply with such requirements shall subject such citizen or national to 

the same penalties and provisions of law as apply in the case of the failure of such 

an agent of a foreign principal to comply with such requirements. For purposes of 

the Foreign Agents Registration Act of 1938, the Republic of the Marshall Islands 

shall be considered to be a foreign country. 

(b) Subsection (a) of this section shall not apply to a citizen or national of the 

United States employed by the Government of the Republic of the Marshall Islands 

with respect to whom the Government of the Republic of the Marshall Islands from 

time to time certifies to the Government of the United States that such citizen or 

national is an employee of the Republic of the Marshall Islands whose principal duties are other than those matters specified in the Foreign Agents Registration Act 

of 1938, as amended, that apply with respect to an agent of a foreign principal. The 

agency or officer of the United States receiving such certifications shall cause them 

to be filed with the Attorney General, who shall maintain a publicly available list 

of the persons so certified. 

Article VI 

Environmental Protection 

Section 161

The Governments of the United States and the Republic of the Marshall Islands 

declare that it is their policy to promote efforts to prevent or eliminate damage to 

the environment and biosphere and to enrich understanding of the natural reVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00050 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
51

sources of the Republic of the Marshall Islands. In order to carry out this policy, 

the Government of the United States and the Government of the Republic of the 

Marshall Islands agree to the following mutual and reciprocal undertakings: 

(a) The Government of the United States: 

(1) shall, for its activities controlled by the U.S. Army at Kwajalein 

Atoll and in the Mid-Atoll Corridor and for U.S. Army Kwajalein Atoll activities in the Republic of the Marshall Islands, continue to apply the Environmental Standards and Procedures for United States Army Kwajalein 

Atoll Activities in the Republic of the Marshall Islands, unless and until 

those Standards or Procedures are modified by mutual agreement of the 

Governments of the United States and the Republic of the Marshall Islands; 

(2) shall apply the National Environmental Policy Act of 1969, 83 Stat. 

852, 42 U.S.C. 4321 et seq., to its activities under the Compact, as amended, and its related agreements as if the Republic of the Marshall Islands 

were the United States; 

(3) in the conduct of any activity not described in section 161(a)(1) requiring the preparation of an Environmental Impact Statement under section 161(a)(2), shall comply with standards substantively similar to those 

required by the following laws of the United States, taking into account the 

particular environment of the Republic of the Marshall Islands; the Endangered Species Act of 1973, as amended, 16 U.S.C. 1531 et seq.; the Clean 

Air Act, as amended, 42 U.S.C. 7401 et seq.; the Clean Water Act (Federal 

Water Pollution Control Act), as amended, 33 U.S.C. 1251 et seq.; Title I 

of the Marine Protection, Research and Sanctuaries Act of 1972 (the Ocean 

Dumping Act), 33 U.S.C. 1411 et seq.; the Toxic Substances Control Act, as 

amended, 15 U.S.C. 2601 et seq.; the Solid Waste Disposal Act, as amended, 

42 U.S.C. 6901 et seq.; and such other environmental protection laws of the 

United States and the Republic of the Marshall Islands as may be agreed 

from time to time with the Government of the Republic of the Marshall Islands; 

(4) shall, prior to conducting any activity not described in section 

161(a)(1) requiring the preparation of an Environmental Impact Statement 

under section 161(a)(2), develop, as agreed with the Government of the Republic of the Marshall Islands, written environmental standards and procedures to implement the substantive provisions of the laws made applicable 

to U.S. Government activities in the Republic of the Marshall Islands, pursuant to section 161(a)(3). 

(b) The Government of the Republic of the Marshall Islands shall continue 

to develop and implement standards and procedures to protect its environment. 

As a reciprocal obligation to the undertakings of the Government of the United 

States under this Article, the Republic of the Marshall Islands, taking into account its particular environment, shall continue to develop and implement 

standards for environmental protection substantively similar to those required 

of the Government of the United States by section 161(a)(3) prior to its conducting activities in the Republic of the Marshall Islands, substantively equivalent to activities conducted there by the Government of the United States and, 

as a further reciprocal obligation, shall enforce those standards.

(c) Section 161(a), including any standard or procedure applicable thereunder, and section 161(b) may be modified or superseded in whole or in part 

by agreement of the Government of the United States and the Government of 

the Republic of the Marshall Islands. 

(d) In the event that an Environmental Impact Statement is no longer required under the laws of the United States for major Federal actions significantly affecting the quality of the human environment, the regulatory regime 

established under sections 161(a)(3) and 161(a)(4) shall continue to apply to 

such activities of the Government of the United States until amended by mutual agreement. 

(e) The President of the United States may exempt any of the activities of 

the Government of the United States under this Compact, as amended, and its 

related agreements from any environmental standard or procedure which may 

be applicable under sections 161(a)(3) and 161(a)(4) if the President determines 

it to be in the paramount interest of the Government of the United States to 

do so, consistent with Title Three of this Compact, as amended, and the obligations of the Government of the United States under international law. Prior to 

any decision pursuant to this subsection, the views of the Government of the 

Republic of the Marshall Islands shall be sought and considered to the extent 

practicable. If the President grants such an exemption, to the extent pracVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00051 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
52

ticable, a report with his reasons for granting such exemption shall be given 

promptly to the Government of the Republic of the Marshall Islands. 

(f) The laws of the United States referred to in section 161(a)(3) shall apply 

to the activities of the Government of the United States under this Compact, 

as amended, and its related agreements only to the extent provided for in this 

section. 

Section 162

The Government of the Republic of the Marshall Islands may bring an action 

for judicial review of any administrative agency action or any activity of the Government of the United States pursuant to section 161(a) for enforcement of the obligations of the Government of the United States arising thereunder. The United States 

District Court for the District of Hawaii and the United States District Court for 

the District of Columbia shall have jurisdiction over such action or activity, and over 

actions brought under section 172(b) which relate to the activities of the Government of the United States and its officers and employees, governed by section 161, 

provided that: 

(a) Such actions may only be civil actions for any appropriate civil relief 

other than punitive damages against the Government of the United States or, 

where required by law, its officers in their official capacity; no criminal actions 

may arise under this section. 

(b) Actions brought pursuant to this section may be initiated only by the 

Government of the Republic of the Marshall Islands. 

(c) Administrative agency actions arising under section 161 shall be reviewed pursuant to the standard of judicial review set forth in 5 U.S.C. 706. 

(d) The United States District Court for the District of Hawaii and the 

United States District Court for the District of Columbia shall have jurisdiction 

to issue all necessary processes, and the Government of the United States 

agrees to submit itself to the jurisdiction of the court; decisions of the United 

States District Court shall be reviewable in the United States Court of Appeals 

for the Ninth Circuit or the United States Court of Appeals for the District of 

Columbia, respectively, or in the United States Supreme Court as provided by 

the laws of the United States. 

(e) The judicial remedy provided for in this section shall be the exclusive 

remedy for the judicial review or enforcement of the obligations of the Government of the United States under this Article and actions brought under section 

172(b), which relate to the activities of the Government of the United States 

and its officers and employees governed by section 161. 

(f) In actions pursuant to this section, the Government of the Republic of 

the Marshall Islands shall be treated as if it were a United States citizen. 

Section 163

(a) For the purpose of gathering data necessary to study the environmental effects of activities of the Government of the United States subject to the requirements of this Article, the Government of the Republic of the Marshall Islands shall 

be granted access to facilities operated by the Government of the United States in 

the Republic of the Marshall Islands, to the extent necessary for this purpose, except to the extent such access would unreasonably interfere with the exercise of the 

authority and responsibility of the Government of the United States under Title 

Three. 

(b) The Government of the United States, in turn, shall be granted access to 

the Republic of the Marshall Islands for the purpose of gathering data necessary 

to discharge its obligations under this Article, except to the extent such access 

would unreasonably interfere with the exercise of the authority and responsibility 

of the Government of the Republic of the Marshall Islands under Title One, and to 

the extent necessary for this purpose shall be granted access to documents and 

other information to the same extent similar access is provided the Government of 

the Republic of the Marshall Islands under the Freedom of Information Act, 5 

U.S.C. 552. 

(c) The Government of the Republic of the Marshall Islands shall not impede 

efforts by the Government of the United States to comply with applicable standards 

and procedures. 

Article VII 

General Legal Provisions 

Section 171

Except as provided in this Compact, as amended, or its related agreements, the 

application of the laws of the United States to the Trust Territory of the Pacific IsVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00052 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
53

lands by virtue of the Trusteeship Agreement ceased with respect to the Marshall 

Islands on October 21, 1986, the date the Compact went into effect.

Section 172

(a) Every citizen of the Republic of the Marshall Islands who is not a resident 

of the United States shall enjoy the rights and remedies under the laws of the 

United States enjoyed by any non-resident alien. 

(b) The Government of the Republic of the Marshall Islands and every citizen 

of the Republic of the Marshall Islands shall be considered to be a ‘‘person’’ within 

the meaning of the Freedom of Information Act, 5 U.S.C. 552, and of the judicial 

review provisions of the Administrative Procedure Act, 5 U.S.C. 701-706, except that 

only the Government of the Republic of the Marshall Islands may seek judicial review under the Administrative Procedure Act or judicial enforcement under the 

Freedom of Information Act when such judicial review or enforcement relates to the 

activities of the Government of the United States governed by sections 161 and 162. 

Section 173

The Governments of the United States and the Republic of the Marshall Islands 

agree to adopt and enforce such measures, consistent with this Compact, as amended, and its related agreements, as may be necessary to protect the personnel, property, installations, services, programs and official archives and documents maintained by the Government of the United States in the Republic of the Marshall Islands pursuant to this Compact, as amended, and its related agreements and by the 

Government of the Republic of the Marshall Islands in the United States pursuant 

to this Compact, Compact, as amended, and its related agreements. 

Section 174

Except as otherwise provided in this Compact, as amended, and its related 

agreements: 

(a) The Government of the Republic of the Marshall Islands, and its agencies and officials, shall be immune from the jurisdiction of the court of the 

United States, and the Government of the United States, and its agencies and 

officials, shall be immune from the jurisdiction of the courts of the Republic of 

the Marshall Islands. 

(b) The Government of the United States accepts responsibility for and 

shall pay: 

(1) any unpaid money judgment rendered by the High Court of the 

Trust Territory of the Pacific Islands against the Government of the United 

States with regard to any cause of action arising as a result of acts or omissions of the Government of the Trust Territory of the Pacific Islands or the 

Government of the United States prior to October 21, 1986; 

(2) any claim settled by the claimant and the Government of the Trust 

Territory of the Pacific Islands but not paid as of the October 21, 1986; and 

(3) settlement of any administrative claim or of any action before a 

court of the Trust Territory of the Pacific Islands or the Government of the 

United States, arising as a result of acts or omissions of the Government 

of the Trust Territory of the Pacific Islands or the Government of the 

United States. 

(c) Any claim not referred to in section 174(b) and arising from an act or 

omission of the Government of the Trust Territory of the Pacific Islands or the 

Government of the United States prior to the effective date of the Compact shall 

be adjudicated in the same manner as a claim adjudicated according to section 

174(d). In any claim against the Government of the Trust Territory of the Pacific Islands, the Government of the United States shall stand in the place of 

the Government of the Trust Territory of the Pacific Islands. A judgment on any 

claim referred to in section 174(b) or this subsection, not otherwise satisfied by 

the Government of the United States, may be presented for certification to the 

United States Court of Appeals for the Federal Circuit, or its successor courts, 

which shall have jurisdiction therefore, notwithstanding the provisions of 28 

U.S.C. 1502, and which court’s decisions shall be reviewable as provided by the 

laws of the United States. The United States Court of Appeals for the Federal 

Circuit shall certify such judgment, and order payment thereof, unless it finds, 

after a hearing, that such judgment is manifestly erroneous as to law or fact, 

or manifestly excessive. In either of such cases the United States Court of Appeals for the Federal Circuit shall have jurisdiction to modify such judgment. 

(d) The Government of the Republic of the Marshall Islands shall not be 

immune from the jurisdiction of the courts of the United States, and the Government of the United States shall not be immune from the jurisdiction of the 

courts of the Republic of the Marshall Islands in any civil case in which an exception to foreign state immunity is set forth in the Foreign Sovereign Immunities Act (28 U.S.C. 1602 et seq.) or its successor statutes. 

54

Section 175

(a) A separate agreement, which shall come into effect simultaneously with this 

Compact, as amended, and shall have the force of law, shall govern mutual assistance and cooperation in law enforcement matters, including the pursuit, capture, 

imprisonment and extradition of fugitives from justice and the transfer of prisoners, 

as well as other law enforcement matters. In the United States, the laws of the 

United States governing international extradition, including 18 U.S.C. 3184, 3186, 

and 3188–95, shall be applicable to the extradition of fugitives under the separate 

agreement, and the laws of the United States governing the transfer of prisoners, 

including 18 U.S.C. 4100–15, shall be applicable to the transfer of prisoners under 

the separate agreement; and 

(b) A separate agreement, which shall come into effect simultaneously with this 

Compact, as amended, and shall have the force of law, shall govern requirements 

relating to labor recruitment practices, including registration, reporting, suspension 

or revocation of authorization to recruit persons for employment in the United 

States, and enforcement for violations of such requirements. 

Section 176

The Government of the Republic of the Marshall Islands confirms that final 

judgments in civil cases rendered by any court of the Trust Territory of the Pacific 

Islands shall continue in full force and effect, subject to the constitutional power of 

the courts of the Republic of the Marshall Islands to grant relief from judgments 

in appropriate cases. 

Section 177

Section 177 of the Compact entered into force with respect to the Marshall Islands on October 21, 1986 as follows: 

‘‘(a) The Government of the United States accepts the responsibility for 

compensation owing to citizens of the Marshall Islands, or the Federated States 

of Micronesia, (or Palau) for loss or damage to property and person of the citizens of the Marshall Islands, or the Federated States of Micronesia, resulting 

from the nuclear testing program which the Government of the United States 

conducted in the Northern Marshall Islands between June 30, 1946, and August 

18, 1958. 

(b) The Government of the United States and the Government of the Marshall Islands shall set forth in a separate agreement provisions for the just and 

adequate settlement of all such claims which have arisen in regard to the Marshall Islands and its citizens and which have not as yet been compensated or 

which in the future may arise, for the continued administration by the Government of the United States of direct radiation related medical surveillance and 

treatment programs and radiological monitoring activities and for such additional programs and activities as may be mutually agreed, and for the assumption by the Government of the Marshall Islands of responsibility for enforcement of limitations on the utilization of affected areas developed in cooperation 

with the Government of the United States and for the assistance by the Government of the United States in the exercise of such responsibility as may be mutually agreed. This separate agreement shall come into effect simultaneously with 

this Compact and shall remain in effect in accordance with its own terms. 

(c) The Government of the United States shall provide to the Government 

of the Marshall Islands, on a grant basis, the amount of $150 million to be paid 

and distributed in accordance with the separate agreement referred to in this 

Section, and shall provide the services and programs set forth in this separate 

agreement, the language of which is incorporated into this Compact.’’

The Compact, as amended, makes no changes to, and has no effect upon, Section 

177 of the Compact, nor does the Compact, as amended, change or affect the separate agreement referred to in Section 177 of the Compact including Articles IX and 

X of that separate agreement, and measures taken by the parties thereunder. 

Section 178

(a) The Federal agencies of the Government of the United States that provide 

services and related programs in the Republic of the Marshall Islands pursuant to 

Title Two are authorized to settle and pay tort claims arising in the Republic of the 

Marshall Islands from the activities of such agencies or from the acts or omissions 

of the employees of such agencies. Except as provided in section 178(b), the provisions of 28 U.S.C. 2672 and 31 U.S.C. 1304 shall apply exclusively to such administrative settlements and payments. 

(b) Claims under section 178(a) that cannot be settled under section 178(a) shall 

be disposed of exclusively in accordance with Article II of Title Four. Arbitration 

awards rendered pursuant to this subsection shall be paid out of funds under 31 

U.S.C. 1304. 

55

(c) The Government of the United States and the Government of the Republic 

of the Marshall Islands shall, in the separate agreement referred to in section 231, 

provide for: 

(1) the administrative settlement of claims referred to in section 178(a), including designation of local agents in each State of the Republic of the Marshall 

Islands; such agents to be empowered to accept, investigate and settle such 

claims, in a timely manner, as provided in such separate agreements; and 

(2) arbitration, referred to in section 178(b), in a timely manner, at a site 

convenient to the claimant, in the event a claim is not otherwise settled pursuant to section 178(a). 

(d) The provisions of section 174(d) shall not apply to claims covered by this section. 

(e) Except as otherwise explicitly provided by law of the United States, this 

Compact, as amended, or its related agreements, neither the Government of the 

United States, its instrumentalities, nor any person acting on behalf of the Government of the United States, shall be named a party in any action based on, or arising 

out of, the activity or activities of a recipient of any grant or other assistance provided by the Government of the United States (or the activity or activities of the 

recipient’s agency or any other person or entity acting on behalf of the recipient). 

Section 179

(a) The courts of the Republic of the Marshall Islands shall not exercise criminal jurisdiction over the Government of the United States, or its instrumentalities. 

(b) The courts of the Republic of the Marshall Islands shall not exercise criminal jurisdiction over any person if the Government of the United States provides notification to the Government of the Republic of the Marshall Islands that such person was acting on behalf of the Government of the United States, for actions taken 

in furtherance of section 221 or 224 of this amended Compact, or any other provision of law authorizing financial, program, or service assistance to the Republic of 

the Marshall Islands. 

TITLE TWO 

ECONOMIC RELATIONS 

Article I 

Grant Assistance 

Section 211 - Annual Grant Assistance 

(a) In order to assist the Government of the Republic of the Marshall Islands 

in its efforts to promote the economic advancement and budgetary self-reliance of 

its people, and in recognition of the special relationship that exists between the Republic of the Marshall Islands and the United States, the Government of the United 

States shall provide assistance on a grant basis for a period of twenty years in the 

amounts set forth in section 217, commencing on the effective date of this Compact, 

as amended. Such grants shall be used for assistance in education, health care, the 

environment, public sector capacity building, and private sector development, or for 

other areas as mutually agreed, with priorities in the education and health care sectors. Consistent with the medium-term budget and investment framework described 

in subsection (f) of this section, the proposed division of this amount among the 

identified areas shall require the concurrence of both the Government of the United 

States and the Government of the Republic of the Marshall Islands, through the 

Joint Economic Management and Financial Accountability Committee described in 

section 214. The Government of the United States shall disburse the grant assistance and monitor the use of such grant assistance in accordance with the provisions 

of this Article and an Agreement Concerning Procedures for the Implementation of 

United States Economic Assistance Provided in the Compact, as Amended, of Free 

Association Between the Government of the United States of America and the Government of the Republic of the Marshall Islands (‘‘Fiscal Procedures Agreement’’) 

which shall come into effect simultaneously with this Compact, as amended. 

(1) EDUCATION.—United States grant assistance shall be made available in 

accordance with the strategic framework described in subsection (f) of this section to support and improve the educational system of the Republic of the Marshall Islands and develop the human, financial, and material resources necessary for the Republic of the Marshall Islands to perform these services. Emphasis should be placed on advancing a quality basic education system. 

(2) HEALTH.—United States grant assistance shall be made available in accordance with the strategic framework described in subsection (f) of this section 

56

to support and improve the delivery of preventive, curative and environmental 

care and develop the human, financial, and material resources necessary for the 

Republic of the Marshall Islands to perform these services. 

(3) PRIVATE SECTOR DEVELOPMENT.—United States grant assistance shall be 

made available in accordance with the strategic framework described in subsection (f) of this section to support the efforts of the Republic of the Marshall 

Islands to attract foreign investment and increase indigenous business activity 

by vitalizing the commercial environment, ensuring fair and equitable application of the law, promoting adherence to core labor standards, maintaining 

progress toward privatization of state-owned and partially state-owned enterprises, and engaging in other reforms. 

(4) CAPACITY BUILDING IN THE PUBLIC SECTOR.—United States grant assistance shall be made available in accordance with the strategic framework described in subsection (f) of this section to support the efforts of the Republic of 

the Marshall Islands to build effective, accountable and transparent national 

and local government and other public sector institutions and systems. 

(5) ENVIRONMENT.—United States grant assistance shall be made available 

in accordance with the strategic framework described in subsection (f) of this 

section to increase environmental protection; establish and manage conservation 

areas; engage in environmental infrastructure planning, design construction 

and operation; and to involve the citizens of the Republic of the Marshall Islands in the process of conserving their country’s natural resources. 

(b) KWAJALEIN ATOLL.—

(1) Of the total grant assistance made available under subsection (a) of this 

section, the amount specified herein shall be allocated annually from fiscal year 

2004 through fiscal year 2023 (and thereafter in accordance with the Agreement 

between the Government of the United States and the Government of the Republic of the Marshall Islands Regarding Military Use and Operating Rights) 

to advance the objectives and specific priorities set forth in subsections (a) and 

(d) of this section and the Fiscal Procedures Agreement, to address the special 

needs of the community at Ebeye, Kwajalein Atoll and other Marshallese communities within Kwajalein Atoll. This United States grant assistance shall be 

made available, in accordance with the medium-term budget and investment 

framework described in subsection (f) of this section, to support and improve the 

infrastructure and delivery of services and develop the human and material resources necessary for the Republic of the Marshall Islands to carry out its responsibility to maintain such infrastructure and deliver such services. The 

amount of this assistance shall be $3,100,000, with an inflation adjustment as 

provided in section 218, from fiscal year 2004 through fiscal year 2013 and the 

fiscal year 2013 level of funding, with an inflation adjustment as provided in 

section 218, will be increased by $2 million for fiscal year 2014. The fiscal year 

2014 level of funding, with an inflation adjustment as provided in section 218, 

will be made available from fiscal year 2015 through fiscal year 2023 (and 

thereafter as noted above). 

(2) The Government of the United States shall also provide to the Government of the Republic of the Marshall Islands, in conjunction with section 321(a) 

of this Compact, as amended, an annual payment from fiscal year 2004 through 

fiscal year 2023 (and thereafter in accordance with the Agreement between the 

Government of the United States and the Government of the Republic of the 

Marshall Islands Regarding Military Use and Operating Rights) of $1.9 million. 

This grant assistance will be subject to the Fiscal Procedures Agreement and 

will be adjusted for inflation under section 218 and used to address the special 

needs of the community at Ebeye, Kwajalein Atoll and other Marshallese communities within Kwajalein Atoll with emphasis on the Kwajalein landowners, 

as described in the Fiscal Procedures Agreement. 

(3) Of the total grant assistance made available under subsection (a) of this 

section, and in conjunction with section 321(a) of the Compact, as amended, 

$200,000, with an inflation adjustment as provided in section 218, shall be allocated annually from fiscal year 2004 through fiscal year 2023 (and thereafter 

as provided in the Agreement between the Government of the United States 

and the Government of the Republic of the Marshall Islands Regarding Military 

Use and Operating Rights) for a grant to support increased participation of the 

Government of the Republic of the Marshall Islands Environmental Protection 

Authority in the annual U.S. Army Kwajalein Atoll Environmental Standards 

Survey and to promote a greater Government of the Republic of the Marshall 

Islands capacity for independent analysis of the Survey’s findings and conclusions. 

57

(c) HUMANITARIAN ASSISTANCE-REPUBLIC OF THE MARSHALL ISLANDS PRO- GRAM.—In recognition of the special development needs of the Republic of the Marshall Islands, the Government of the United States shall make available to the Government of the Republic of the Marshall Islands, on its request and to be deducted 

from the grant amount made available under subsection (a) of this section, a Humanitarian Assistance - Republic of the Marshall Islands (‘‘HARMI’’) Program with 

emphasis on health, education, and infrastructure (including transportation), 

projects and such other projects as mutually agreed. The terms and conditions of 

the HARMI shall be set forth in the Agreement Regarding the Military Use and Operating Rights of the Government of the United States in the Republic of the Marshall Islands Concluded Pursuant to Sections 321 and 323 of the Compact of Free 

Association, as Amended, which shall come into effect simultaneously with the 

amendments to this Compact. 

(d) PUBLIC INFRASTRUCTURE.— (1) Unless otherwise agreed, not less than 30 percent and not more than 

50 percent of U.S. annual grant assistance provided under this section shall be 

made available in accordance with a list of specific projects included in the infrastructure improvement and maintenance plan prepared by the Government 

of the Republic of the Marshall Islands as part of the strategic framework described in subsection (f) of this section. 

(2) INFRASTRUCTURE MAINTENANCE FUND.—Five percent of the annual public infrastructure grant made available under paragraph (1) of this subsection 

shall be set aside, with an equal contribution from the Government of the Republic of the Marshall Islands, as a contribution to an Infrastructure Maintenance Fund. Administration of the Infrastructure Maintenance Fund shall be 

governed by the Fiscal Procedures Agreement. 

(e) DISASTER ASSISTANCE EMERGENCY FUND.—Of the total grant assistance 

made available under subsection (a) of this section, an amount of two hundred thousand dollars ($200,000) shall be provided annually, with an equal contribution from 

the Government of the Republic of the Marshall Islands, as a contribution to a Disaster Assistance Emergency Fund (‘‘DAEF’’). Any funds from the DAEF may be used 

only for assistance and rehabilitation resulting from disasters and emergencies. The 

funds will be accessed upon declaration of a State of Emergency by the Government 

of the Republic of the Marshall Islands, with the concurrence of the United States 

Chief of Mission to the Republic of the Marshall Islands. Administration of the 

DAEF shall be governed by the Fiscal Procedures Agreement. 

(f) BUDGET AND INVESTMENT FRAMEWORK.—The Government of the Republic of 

the Marshall Islands shall prepare and maintain an official medium-term budget 

and investment framework. The framework shall be strategic in nature, shall be 

continuously reviewed and updated through the annual budget process, and shall 

make projections on a multi-year rolling basis. Each of the sectors and areas named 

in subsections (a), (b), and (d) of this section, or other sectors and areas as mutually 

agreed, shall be accorded specific treatment in the framework. Those portions of the 

framework that contemplate the use of United States grant funds shall require the 

concurrence of both the Government of the United States and the Government of 

the Republic of the Marshall Islands. 

Section 212 - Kwajalein Impact and Use 

The Government of the United States shall provide to the Government of the 

Republic of the Marshall Islands in conjunction with section 321(a) of the Compact, 

as amended, and the agreement between the Government of the United States and 

the Government of the Republic of the Marshall Islands regarding military use and 

operating rights, a payment in fiscal year 2004 of $15,000,000, with no adjustment 

for inflation. In fiscal year 2005 and through fiscal year 2013, the annual payment 

will be the fiscal year 2004 amount ($15,000,000) with an inflation adjustment as 

provided under section 218. In fiscal year 2014, the annual payment will be 

$18,000,000 (with no adjustment for inflation) or the fiscal year 2013 amount with 

an inflation adjustment under section 218, whichever is greater. For fiscal year 2015 

through fiscal year 2023 (and thereafter in accordance with the Agreement between 

the Government of the United States and the Government of the Republic of the 

Marshall Islands Regarding Military Use and Operating Rights) the annual payment will be the fiscal year 2014 amount, with an inflation adjustment as provided 

under section 218. 

Section 213 - Accountability 

(a) Regulations and policies normally applicable to United States financial assistance to its state and local governments, as set forth in the Fiscal Procedures 

Agreement, shall apply to each grant described in section 211, and to grants administered under section 221 below, except as modified in the separate agreements referred to in section 231 of this Compact, as amended, or by U.S. law. As set forth 

58

in the Fiscal Procedures Agreement, reasonable terms and conditions, including annual performance indicators that are necessary to ensure effective use of United 

States assistance and reasonable progress toward achieving program objectives may 

be attached. In addition, the United States may seek appropriate remedies for noncompliance with the terms and conditions attached to the assistance, or for failure 

to comply with section 234, including withholding assistance. 

(b) The Government of the United States shall, for each fiscal year of the twenty years during which assistance is to be provided on a sector grant basis under section 211 (a), grant the Government of the Republic of the Marshall Islands an 

amount equal to the lesser of (i) one half of the reasonable, properly documented 

cost incurred during such fiscal year to conduct the annual audit required under Article VIII (2) of the Fiscal Procedures Agreement or (ii) $500,000. Such amount will 

not be adjusted for inflation under section 218 or otherwise. 

Section 214 - Joint Economic Management and Financial Accountability Committee 

The Governments of the United States and the Republic of the Marshall Islands 

shall establish a Joint Economic Management and Financial Accountability Committee, composed of a U.S. chair, two other members from the Government of the 

United States and two members from the Government of the Republic of the Marshall Islands. The Joint Economic Management and Financial Accountability Committee shall meet at least once each year to review the audits and reports required 

under this Title and the Fiscal Procedures Agreement, evaluate the progress made 

by the Republic of the Marshall Islands in meeting the objectives identified in its 

framework described in subsection (f) of section 211, with particular focus on those 

parts of the framework dealing with the sectors and areas identified in subsection 

(a) of section 211, identify problems encountered, and recommend ways to increase 

the effectiveness of U.S. assistance made available under this Title. The establishment and operations of the Joint Economic Management and Financial Accountability Committee shall be governed by the Fiscal Procedures Agreement. 

Section 215 - Annual Report 

The Government of the Republic of the Marshall Islands shall report annually 

to the President of the United States on the use of United States sector grant assistance and other assistance and progress in meeting mutually agreed program and 

economic goals. The Joint Economic Management and Financial Accountability 

Committee shall review and comment on the report and make appropriate recommendations based thereon. 

Section 216 - Trust Fund 

(a) The United States shall contribute annually for twenty years from the effective date of the Compact, as amended, in the amounts set forth in section 217 into 

a trust fund established in accordance with the Agreement Between the Government of the United States of America and the Government of the Republic of the 

Marshall Islands Implementing Section 216 and Section 217 of the Compact, as 

Amended, Regarding a Trust Fund (‘‘Trust Fund Agreement’’), which shall come into 

effect simultaneously with this Compact, as amended. Upon termination of the annual grant assistance under section 211 (a), (d) and (e), the earnings of the fund 

shall thereafter be used for the purposes described in section 211 or as otherwise 

mutually agreed. 

(b) The United States contribution into the Trust Fund described in subsection 

(a) of this section is conditioned on the Government of the Republic of the Marshall 

Islands contributing to the Trust Fund at least $25,000,000, on the effective date 

of the Trust Fund Agreement or on October 1, 2003, whichever is later, $2,500,000 

prior to October 1, 2004, and $2,500,000 prior to October 1, 2005. Any funds received by the Republic of the Marshall Islands under section 111(d) of Public Law 

99–239 (January 14, 1986), or successor provisions, would be contributed to the 

Trust Fund as a Republic of the Marshall Islands’ contribution. 

(c) The terms regarding the investment and management of funds and use of 

the income of the Trust Fund shall be governed by the Trust Fund Agreement. 

Funds derived from United States investment shall not be subject to Federal or 

state taxes in the United States or any taxes in the Republic of the Marshall Islands. The Trust Fund Agreement shall also provide for annual reports to the Government of the United States and to the Government of the Republic of the Marshall Islands. The Trust Fund Agreement shall provide for appropriate distributions 

of trust fund proceeds to the Republic of the Marshall Islands and for appropriate 

remedies for the failure of the Republic of the Marshall Islands to use income of 

the Trust Fund for the annual grant purposes set forth in section 211. These remedies may include the return to the United States of the present market value of 

its contributions to the Trust Fund and the present market value of any undistributed income on the contributions of the United States. If this Compact, as amended, 

is terminated, the provisions of sections 451–453 of the Compact, as amended, and 

59

the Trust Fund Agreement shall govern treatment of any U.S. contributions to the 

Trust Fund or accrued income thereon. 

Section 217 - Annual Grant Funding and Trust Fund Contributions 

The funds described in sections 211, 212, 213(b), and 216 shall be made available as follows:

[In millions of dollars] 

Fiscal 

year 

Annual Grants 

Section 211

Audit Grant

Section 213(b) 

Trust Fund

Section 216 (a&c) 

Kwajalein Impact 

Section 212 Total 

2004 35.2 .5 7 15.0 57.7

2005 34.7 .5 7.5 15.0 57.7

2006 34.2 .5 8 15.0 57.7

2007 33.7 .5 8.5 15.0 57.7

2008 33.2 .5 9 15.0 57.7

2009 32.7 .5 9.5 15.0 57.7

2010 32.2 .5 10 15.0 57.7

2011 31.7 .5 10.5 15.0 57.7

2012 31.2 .5 11 15.0 57.7

2013 30.7 .5 11.5 15.0 57.7

2014 32.2 .5 12 18.0 62.7

2015 31.7 .5 12.5 18.0 62.7

2016 31.2 .5 13 18.0 62.7

2017 30.7 .5 13.5 18.0 62.7

2018 30.2 .5 14 18.0 62.7

2019 29.7 .5 14.5 18.0 62.7

2020 29.2 .5 15 18.0 62.7

2021 28.7 .5 15.5 18.0 62.7

2022 28.2 .5 16 18.0 62.7

2023 27.7 .5 16.5 18.0 62.7

Section 218 - Inflation Adjustment 

Except as otherwise provided, the amounts stated in this Title shall be adjusted 

for each United States Fiscal Year by the percent that equals two-thirds of the percent change in the United States Gross Domestic Product Implicit Price Deflator, 

or 5 percent, whichever is less in any one year, using the beginning of Fiscal Year 

2004 as a base. 

Section 219 - Carry-Over of Unused Funds 

If in any year the funds made available by the Government of the United States 

for that year pursuant to this Article are not completely obligated by the Government of the Republic of the Marshall Islands, the unobligated balances shall remain 

available in addition to the funds to be provided in subsequent years. 

Article II 

Services and Program Assistance 

Section 221

(a) SERVICES.—The Government of the United States shall make available to 

the Republic of the Marshall Islands, in accordance with and to the extent provided 

in the Federal Programs and Services Agreement referred to in Section 231, the 

services and related programs of: 

(1) the United States Weather Service; 

(2) the United States Postal Service; 

(3) the United States Federal Aviation Administration; 

(4) the United States Department of Transportation; and 

(5) the Department of Homeland Security, and the United States Agency 

for International Development, Office of Foreign Disaster Assistance. 

Upon the effective date of this Compact, as amended, the United States Departments and Agencies named or having responsibility to provide these services and 

related programs shall have the authority to implement the relevant provisions of 

the Federal Programs and Services Agreement referred to in section 231. 

(b) PROGRAMS.—

(1) Other than the services and programs covered by subsection (a) of this 

section, and to the extent authorized by the Congress of the United States, the 

60

Government of the United States shall make available to the Republic of the 

Marshall Islands the services and programs that were available to the Republic 

of the Marshall Islands on the effective date of this Compact, as amended, to 

the extent that such services and programs continue to be available to State 

and local governments of the United States. As set forth in the Fiscal Procedures Agreement, funds provided under subsection (a) of section 211 shall be 

considered to be local revenues of the Government of the Republic of the Marshall Islands when used as the local share required to obtain Federal programs 

and services. 

(2) Unless provided otherwise by U.S. law, the services and programs described in paragraph (1) of this subsection shall be extended in accordance with 

the terms of the Federal Programs and Services Agreement. 

(c) The Government of the United States shall have and exercise such authority 

as is necessary to carry out its responsibilities under this Title and the Federal Programs and Services Agreement, including the authority to monitor and administer 

all service and program assistance provided by the United States to the Republic 

of the Marshall Islands. The Federal Programs and Services Agreement shall also 

set forth the extent to which services and programs shall be provided to the Republic of the Marshall Islands. 

(d) Except as provided elsewhere in this Compact, as amended, under any separate agreement entered into under this Compact, as amended, or otherwise under 

U.S. law, all Federal domestic programs extended to or operating in the Republic 

of the Marshall Islands shall be subject to all applicable criteria, standards, reporting requirements, auditing procedures, and other rules and regulations applicable 

to such programs and services when operating in the United States. 

(e) The Government of the United States shall make available to the Republic 

of the Marshall Islands alternate energy development projects, studies, and conservation measures to the extent provided for the Freely Associated States in the 

laws of the United States. 

Section 222

The Government of the United States and the Government of the Republic of 

the Marshall Islands may agree from time to time to extend to the Republic of the 

Marshall Islands additional United States grant assistance, services and programs, 

as provided under the laws of the United States. Unless inconsistent with such 

laws, or otherwise specifically precluded by the Government of the United States at 

the time such additional grant assistance, services, or programs are extended, the 

Federal Programs and Services Agreement shall apply to any such assistance, services or programs. 

Section 223

The Government of the Republic of the Marshall Islands shall make available 

to the Government of the United States at no cost such land as may be necessary 

for the operations of the services and programs provided pursuant to this Article, 

and such facilities as are provided by the Government of the Republic of the Marshall Islands at no cost to the Government of the United States as of the effective 

date of this Compact, as amended, or as may be mutually agreed thereafter. 

Section 224

The Government of the Republic of the Marshall Islands may request, from the 

time to time, technical assistance from the Federal agencies and institutions of the 

Government of the United States, which are authorized to grant such technical assistance in accordance with its laws. If technical assistance is granted pursuant to 

such a request, the Government of the United States shall provide the technical assistance in a manner which gives priority consideration to the Republic of the Marshall Islands over other recipients not a part of the United States, its territories or 

possessions, and equivalent consideration to the Republic of the Marshall Islands 

with respect to other states in Free Association with the United States. Such assistance shall be made available on a reimbursable or non-reimbursable basis to the 

extent provided by United States law.

Article III 

Administrative Provisions 

Section 231

The specific nature, extent and contractual arrangements of the services and 

programs provided for in section 221 of this Compact, as amended, as well as the 

legal status of agencies of the Government of the United States, their civilian employees and contractors, and the dependents of such personnel while present in the 

Republic of the Marshall Islands, and other arrangements in connection with the 

61

assistance, services, or programs furnished by the Government of the United States, 

are set forth in a Federal Programs and Services Agreement which shall come into 

effect simultaneously with this Compact, as amended. 

Section 232

The Government of the United States, in consultation with the Government of 

the Republic of the Marshall Islands, shall determine and implement procedures for 

the periodic audit of all grants and other assistance made under Article I of this 

Title and of all funds expended for the services and programs provided under Article 

II of this Title. Further, in accordance with the Fiscal Procedures Agreement described in subsection (a) of section 211, the Comptroller General of the United 

States shall have such powers and authorities as described in sections 103(m) and 

110(c) of Public Law 99–239, 99 Stat. 1777–78, and 99 Stat. 1799 (January 14, 

1986). 

Section 233

Approval of this Compact, as amended, by the Government of the United States, 

in accordance with its constitutional processes, shall constitute a pledge by the 

United States that the sums and amounts specified as grants in section 211 of this 

Compact, as amended, shall be appropriated and paid to the Republic of the Marshall Islands for such period as those provisions of this Compact, as amended, remain in force, provided that the Republic of the Marshall Islands complies with the 

terms and conditions of this Title and related subsidiary agreements. 

Section 234

The Government of the Republic of the Marshall Islands pledges to cooperate 

with, permit, and assist if reasonably requested, designated and authorized representatives of the Government of the United States charged with investigating 

whether Compact funds, or any other assistance authorized under this Compact, as 

amended, have, or are being, used for purposes other than those set forth in this 

Compact, as amended, or its subsidiary agreements. In carrying out this investigative authority, such United States Government representatives may request that 

the Government of the Republic of the Marshall Islands subpoena documents and 

records and compel testimony in accordance with the laws and Constitution of the 

Republic of the Marshall Islands. Such assistance by the Government of the Republic of the Marshall Islands to the Government of the United States shall not be unreasonably withheld. The obligation of the Government of the Marshall Islands to 

fulfill its pledge herein is a condition to its receiving payment of such funds or other 

assistance authorized under this Compact, as amended. The Government of the 

United States shall pay any reasonable costs for extraordinary services executed by 

the Government of the Marshall Islands in carrying out the provisions of this section. 

Article IV 

Trade 

Section 241

The Republic of the Marshall Islands is not included in the customs territory 

of the United States. 

Section 242

The President shall proclaim the following tariff treatment for articles imported 

from the Republic of the Marshall Islands which shall apply during the period of 

effectiveness of this title: 

(a) Unless otherwise excluded, articles imported from the Republic of the 

Marshall Islands, subject to the limitations imposed under section 503(b) of title 

V of the Trade Act of 1974 (19 U.S.C. 2463(b)), shall be exempt from duty. 

(b) Only tuna in airtight containers provided for in heading 1604.14.22 of 

the Harmonized Tariff Schedule of the United States that is imported from the 

Republic of the Marshall Islands and the Federated States of Micronesia during 

any calendar year not to exceed 10 percent of apparent United States consumption of tuna in airtight containers during the immediately preceding calendar 

year, as reported by the National Marine Fisheries Service, shall be exempt 

from duty; but the quantity of tuna given duty-free treatment under this paragraph for any calendar year shall be counted against the aggregated quantity 

of tuna in airtight containers that is dutiable under rate column numbered 1 

of such heading 1604.14.22 for that calendar year. 

(c) The duty-free treatment provided under subsection (a) shall not apply 

to: 

62

(1) watches, clocks, and timing apparatus provided for in Chapter 91, 

excluding heading 9113, of the Harmonized Tariff Schedule of the United 

States; 

(2) buttons (whether finished or not finished) provided for in items 

9606.21.40 and 9606.29.20 of such Schedule; 

(3) textile and apparel articles which are subject to textile agreements; 

and 

(4) footwear, handbags, luggage, flat goods, work gloves, and leather 

wearing apparel which were not eligible articles for purposes of title V of 

the Trade Act of 1974 (19 U.S.C. 2461, et seq.) on April 1, 1984. 

(d) If the cost or value of materials produced in the customs territory of the 

United States is included with respect to an eligible article which is a product 

of the Republic of the Marshall Islands, an amount not to exceed 15 percent of 

the appraised value of the article at the time it is entered that is attributable 

to such United States cost or value may be applied for duty assessment purposes toward determining the percentage referred to in section 503(a)(2) of title 

V of the Trade Act of 1974. 

Section 243

Articles imported from the Republic of the Marshall Islands which are not exempt from duty under subsections (a), (b), (c), and 

(d) of section 242 shall be subject to the rates of duty set forth in column numbered 1-general of the Harmonized Tariff Schedule of the United States (HTSUS). 

Section 244

(a) All products of the United States imported into the Republic of the Marshall 

Islands shall receive treatment no less favorable than that accorded like products 

of any foreign country with respect to customs duties or charges of a similar nature 

and with respect to laws and regulations relating to importation, exportation, taxation, sale, distribution, storage or use. 

(b) The provisions of subsection (a) shall not apply to advantages accorded by 

the Republic of the Marshall Islands by virtue of their full membership in the Pacific Island Countries Trade Agreement (PICTA), done on August, 18, 2001, to those 

governments listed in Article 26 of PICTA, as of the date the Compact, as amended, 

is signed. 

(c) Prior to entering into consultations on, or concluding, a free trade agreement 

with governments not listed in Article 26 of PICTA, the Republic of the Marshall 

Islands shall consult with the United States regarding whether or how subsection 

(a) of section 244 shall be applied. 

Article V 

Finance and Taxation 

Section 251

The currency of the United States is the official circulating legal tender of the 

Republic of the Marshall Islands. Should the Government of the Republic of the 

Marshall Islands act to institute another currency, the terms of an appropriate currency transitional period shall be as agreed with the Government of the United 

States. 

Section 252

The Government of the Republic of the Marshall Islands may, with respect to 

United States persons, tax income derived from sources within its respective jurisdiction, property situated therein, including transfers of such property by gift or at 

death, and products consumed therein, in such manner as the Government of the 

Republic of the Marshall Islands deems appropriate. The determination of the 

source of any income, or the situs of any property, shall for purposes of this Compact, as amended, be made according to the United States Internal Revenue Code. 

Section 253

A citizen of the Republic of the Marshall Islands, domiciled therein, shall be exempt from estate, gift, and generation-skipping transfer taxes imposed by the Government of the United States, provided that such citizen of the Republic of the Marshall Islands is neither a citizen nor a resident of the United States. 

Section 254

(a) In determining any income tax imposed by the Government of the Republic 

of the Marshall Islands, the Government of the Republic of the Marshall Islands 

shall have authority to impose tax upon income derived by a resident of the Republic of the Marshall Islands from sources without the Republic of the Marshall Islands, in the same manner and to the same extent as the Government of the Republic of the Marshall Islands imposes tax upon income derived from within its own 

63

jurisdiction. If the Government of the Republic of the Marshall Islands exercises 

such authority as provided in this subsection, any individual resident of the Republic of the Marshall Islands who is subject to tax by the Government of the United 

States on income which is also taxed by the Government of the Republic of the Marshall Islands shall be relieved of liability to the Government of the United States 

for the tax which, but for this subsection, would otherwise be imposed by the Government of the United States on such income. However, the relief from liability to 

the United States Government referred to in the preceding sentence means only relief in the form of the foreign tax credit (or deduction in lieu thereof) available with 

respect to the income taxes of a possession of the United States, and relief in the 

form of the exclusion under section 911 of the Internal Revenue Code of 1986. For 

purposes of this section, the term ‘‘resident of the Republic of the Marshall Islands’’ 

shall be deemed to include any person who was physically present in the Republic 

of the Marshall Islands for a period of 183 or more days during any taxable year. 

(b) If the Government of the Republic of the Marshall Islands subjects income 

to taxation substantially similar to that which was imposed by the Trust Territory 

Code in effect on January 1, 1980, such Government shall be deemed to have exercised the authority described in section 254(a). 

Section 255

For purposes of section 274(h)(3)(A) of the U.S. Internal Revenue Code of 1986, 

the term ‘‘North American Area’’ shall include the Republic of the Marshall Islands. 

TITLE THREE 

SECURITY AND DEFENSE RELATIONS 

Article I 

Authority and Responsibility 

Section 311

(a) The Government of the United States has full authority and responsibility 

for security and defense matters in or relating to the Republic of the Marshall Islands. 

(b) This authority and responsibility includes: 

(1) the obligation to defend the Republic of the Marshall Islands and its 

people from attack or threats thereof as the United States and its citizens are 

defended; 

(2) the option to foreclose access to or use of the Republic of the Marshall 

Islands by military personnel or for the military purposes of any third country; 

and 

(3) the option to establish and use military areas and facilities in the Republic of the Marshall Islands, subject to the terms of the separate agreements 

referred to in sections 321 and 323. 

(c) The Government of the United States confirms that it shall act in accordance 

with the principles of international law and the Charter of the United Nations in 

the exercise of this authority and responsibility.

Section 312

Subject to the terms of any agreements negotiated in accordance with sections 

321 and 323, the Government of the United States may conduct within the lands, 

waters and airspace of the Republic of the Marshall Islands the activities and operations necessary for the exercise of its authority and responsibility under this Title. 

Section 313

(a) The Government of the Republic of the Marshall Islands shall refrain from 

actions that the Government of the United States determines, after appropriate consultation with that Government, to be incompatible with its authority and responsibility for security and defense matters in or relating to the Republic of the Marshall 

Islands. 

(b) The consultations referred to in this section shall be conducted expeditiously 

at senior levels of the two Governments, and the subsequent determination by the 

Government of the United States referred to in this section shall be made only at 

senior interagency levels of the Government of the United States. 

(c) The Government of the Republic of the Marshall Islands shall be afforded, 

on an expeditious basis, an opportunity to raise its concerns with the United States 

Secretary of State personally and the United States Secretary of Defense personally 

regarding any determination made in accordance with this section. 

Section 314

64

(a) Unless otherwise agreed, the Government of the United States shall not, in 

the Republic of the Marshall Islands: 

(1) test by detonation or dispose of any nuclear weapon, nor test, dispose 

of, or discharge any toxic chemical or biological weapon; or 

(2) test, dispose of, or discharge any other radioactive, toxic chemical or biological materials in an amount or manner that would be hazardous to public 

health or safety. 

(b) Unless otherwise agreed, other than for transit or overflight purposes or during time of a national emergency declared by the President of the United States, 

a state of war declared by the Congress of the United States or as necessary to defend against an actual or impending armed attack on the United States, the Republic of the Marshall Islands or the Federated States of Micronesia, the Government 

of the United States shall not store in the Republic of the Marshall Islands or the 

Federated States of Micronesia any toxic chemical weapon, nor any radioactive materials nor any toxic chemical materials intended for weapons use. 

(c) Radioactive, toxic chemical, or biological materials not intended for weapons 

use shall not be affected by section 314(b). 

(d) No material or substance referred to in this section shall be stored in the 

Republic of the Marshall Islands except in an amount and manner which would not 

be hazardous to public health or safety. In determining what shall be an amount 

or manner which would be hazardous to public health or safety under this section, 

the Government of the United States shall comply with any applicable mutual 

agreement, international guidelines accepted by the Government of the United 

States, and the laws of the United States and their implementing regulations. 

(e) Any exercise of the exemption authority set forth in section 161(e) shall have 

no effect on the obligations of the Government of the United States under this section or on the application of this subsection. 

(f) The provisions of this section shall apply in the areas in which the Government of the Republic of the Marshall Islands exercises jurisdiction over the living 

resources of the seabed, subsoil or water column adjacent to its coasts. 

Section 315

The Government of the United States may invite members of the armed forces 

of other countries to use military areas and facilities in the Republic of the Marshall 

Islands, in conjunction with and under the control of United States Armed Forces. 

Use by units of the armed forces of other countries of such military areas and facilities, other than for transit and overflight purposes, shall be subject to consultation 

with and, in the case of major units, approval of the Government of the Republic 

of the Marshall Islands. 

Section 316

The authority and responsibility of the Government of the United States under 

this Title may not be transferred or otherwise assigned. 

Article II 

Defense Facilities and Operating Rights 

Section 321

(a) Specific arrangements for the establishment and use by the Government of 

the United States of military areas and facilities in the Republic of the Marshall 

Islands are set forth in separate agreements, which shall remain in effect in accordance with the terms of such agreements. 

(b) If, in the exercise of its authority and responsibility under this Title, the 

Government of the United States requires the use of areas within the Republic of 

the Marshall Islands in addition to those for which specific arrangements are concluded pursuant to section 321(a), it may request the Government of the Republic 

of the Marshall Islands to satisfy those requirements through leases or other arrangements. The Government of the Republic of the Marshall Islands shall sympathetically consider any such request and shall establish suitable procedures to discuss it with and provide a prompt response to the Government of the United States. 

(c) The Government of the United States recognizes and respects the scarcity 

and special importance of land in the Republic of the Marshall Islands. In making 

any requests pursuant to section 321(b), the Government of the United States shall 

follow the policy of requesting the minimum area necessary to accomplish the required security and defense purpose, of requesting only the minimum interest in 

real property necessary to support such purpose, and of requesting first to satisfy 

its requirement through public real property, where available, rather than through 

private real property. 

Section 322

65

The Government of the United States shall provide and maintain fixed and 

floating aids to navigation in the Republic of the Marshall Islands at least to the 

extent necessary for the exercise of its authority and responsibility under this Title. 

Section 323

The military operating rights of the Government of the United States and the 

legal status and contractual arrangements of the United States Armed Forces, their 

members, and associated civilians, while present in the Republic of the Marshall Islands are set forth in separate agreements, which shall remain in effect in accordance with the terms of such agreements. 

Article III 

Defense Treaties and International Security Agreements 

Section 331

Subject to the terms of this Compact, as amended, and its related agreements, 

the Government of the United States, exclusively, has assumed and enjoys, as to 

the Republic of the Marshall Islands, all obligations, responsibilities, rights and benefits of: 

(a) Any defense treaty or other international security agreement applied by 

the Government of the United States as Administering Authority of the Trust 

Territory of the Pacific Islands as of October 20, 1986. 

(b) Any defense treaty or other international security agreement to which 

the Government of the United States is or may become a party which it determines to be applicable in the Republic of the Marshall Islands. Such a determination by the Government of the United States shall be preceded by appropriate consultation with the Government of the Republic of the Marshall Islands. 

Article IV 

Service in Armed Forces of the United States 

Section 341

Any person entitled to the privileges set forth in Section 141 (with the exception 

of any person described in section 141(a)(5) who is not a citizen of the Republic of 

the Marshall Islands) shall be eligible to volunteer for service in the Armed Forces 

of the United States, but shall not be subject to involuntary induction into military 

service of the United States as long as such person has resided in the United States 

for a period of less than one year, provided that no time shall count towards this 

one year while a person admitted to the United States under the Compact, or the 

Compact, as amended, is engaged in full-time study in the United States. Any person described in section 141(a)(5) who is not a citizen of the Republic of the Marshall Islands shall be subject to United States laws relating to selective service. 

Section 342

The Government of the United States shall have enrolled, at any one time, at 

least one qualified student from the Republic of the Marshall Islands, as may be 

nominated by the Government of the Republic of the Marshall Islands, in each of: 

(a) The United States Coast Guard Academy pursuant to 14 U.S.C. 195. 

(b) The United States Merchant Marine Academy pursuant to 46 U.S.C. 

1295(b)(6), provided that the provisions of 46 U.S.C. 1295b(b)(6)(C) shall not 

apply to the enrollment of students pursuant to section 342(b) of this Compact, 

as amended. 

Article V 

General Provisions 

Section 351

(a) The Government of the United States and the Government of the Republic 

of the Marshall Islands shall continue to maintain a Joint Committee empowered 

to consider disputes arising under the implementation of this Title and its related 

agreements. 

(b) The membership of the Joint Committee shall comprise selected senior officials of the two Governments. The senior United States military commander in the 

Pacific area shall be the senior United States member of the Joint Committee. For 

the meetings of the Joint Committee, each of the two Governments may designate 

additional or alternate representatives as appropriate for the subject matter under 

consideration. 

66

(c) Unless otherwise mutually agreed, the Joint Committee shall meet annually 

at a time and place to be designated, after appropriate consultation, by the Government of the United States. The Joint Committee also shall meet promptly upon request of either of its members. The Joint Committee shall follow such procedures, 

including the establishment of functional subcommittees, as the members may from 

time to time agree. Upon notification by the Government of the United States, the 

Joint Committee of the United States and the Republic of the Marshall Islands shall 

meet promptly in a combined session with the Joint Committee established and 

maintained by the Government of the United States and the Government of the 

Federated States of Micronesia to consider matters within the jurisdiction of the two 

Joint Committees. 

(d) Unresolved issues in the Joint Committee shall be referred to the Governments for resolution, and the Government of the Republic of the Marshall Islands 

shall be afforded, on an expeditious basis, an opportunity to raise its concerns with 

the United States Secretary of Defense personally regarding any unresolved issue 

which threatens its continued association with the Government of the United 

States. 

Section 352

In the exercise of its authority and responsibility under Title Three, the Government of the United States shall accord due respect to the authority and responsibility of the Government of the Republic of the Marshall Islands under Titles One, 

Two and Four and to the responsibility of the Government of the Republic of the 

Marshall Islands to assure the well-being of its people. 

Section 353

(a) The Government of the United States shall not include the Government of 

the Republic of the Marshall Islands as a named party to a formal declaration of 

war, without that Government’s consent. 

(b) Absent such consent, this Compact, as amended, is without prejudice, on the 

ground of belligerence or the existence of a state of war, to any claims for damages 

which are advanced by the citizens, nationals or Government of the Republic of the 

Marshall Islands, which arise out of armed conflict subsequent to October 21, 1986, 

and which are: 

(5) petitions to the Government of the United States for redress; or 

(6) claims in any manner against the government, citizens, nationals or entities of any third country.

(c) Petitions under section 353(b)(1) shall be treated as if they were made by 

citizens of the United States. 

Section 354

(a) The Government of the United States and the Government of the Republic 

of the Marshall Islands are jointly committed to continue their security and defense 

relations, as set forth in this Title. Accordingly, it is the intention of the two countries that the provisions of this Title shall remain binding as long as this Compact, 

as amended, remains in effect, and thereafter as mutually agreed, unless earlier terminated by mutual agreement pursuant to section 441, or amended pursuant to Article III of Title Four. If at any time the Government of the United States, or the 

Government of the Republic of the Marshall Islands, acting unilaterally, terminates 

this Title, such unilateral termination shall be considered to be termination of the 

entire Compact, as amended, in which case the provisions of section 442 and 452 

(in the case of termination by the Government of the United States) or sections 443 

and 453 (in the case of termination by the Government of the Republic of the Marshall Islands), with the exception of paragraph (3) of subsection (a) of section 452 

or paragraph (3) of subsection (a) of section 453, as the case may be, shall apply. 

(b) The Government of the United States recognizes, in view of the special relationship between the Government of the United States and the Government of the 

Republic of the Marshall Islands, and in view of the existence of the separate agreement regarding mutual security concluded with the Government of the Republic of 

the Marshall Islands pursuant to sections 321 and 323, that, even if this Title 

should terminate, any attack on the Republic of the Marshall Islands during the period in which such separate agreement is in effect, would constitute a threat to the 

peace and security of the entire region and a danger to the United States. In the 

event of such an attack, the Government of the United States would take action to 

meet the danger to the United States and to the Republic of the Marshall Islands 

in accordance with its constitutional processes. 

(c) As reflected in Article 21(1)(b) of the Trust Fund Agreement, the Government of the United States and the Government of the Republic of the Marshall Islands further recognize, in view of the special relationship between their countries, 

that even if this Title should terminate, the Government of Republic of the Marshall 

Islands shall refrain from actions which the Government of the United States deterVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00066 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
67

mines, after appropriate consultation with that Government, to be incompatible 

with its authority and responsibility for security and defense matters in or relating 

to the Republic of the Marshall Islands or the Federated States of Micronesia. 

TITLE FOUR 

GENERAL PROVISIONS 

Article I 

Approval and Effective Date 

Section 411

Pursuant to section 432 of the Compact and subject to subsection (e) of section 

461 of the Compact, as amended, the Compact, as amended, shall come into effect 

upon mutual agreement between the Government of the United States and the Government of the Republic of the Marshall Islands subsequent to completion of the following: 

(a) Approval by the Government of the Republic of the Marshall Islands in 

accordance with its constitutional processes. 

(b) Approval by the Government of the United States in accordance with 

its constitutional processes. 

Article II 

Conference and Dispute Resolution 

Section 421

The Government of the United States shall confer promptly at the request of 

the Government of the Republic of the Marshall Islands and that Government shall 

confer promptly at the request of the Government of the United States on matters 

relating to the provisions of this Compact, as amended, or of its related agreements. 

Section 422

In the event the Government of the United States or the Government of the Republic of the Marshall Islands, after conferring pursuant to section 421, determines 

that there is a dispute and gives written notice thereof, the two Governments shall 

make a good faith effort to resolve the dispute between themselves. 

Section 423

If a dispute between the Government of the United States and the Government 

of the Republic of the Marshall Islands cannot be resolved within 90 days of written 

notification in the manner provided in section 422, either party to the dispute may 

refer it to arbitration in accordance with section 424. 

Section 424

Should a dispute be referred to arbitration as provided for in section 423, an 

Arbitration Board shall be established for the purpose of hearing the dispute and 

rendering a decision which shall be binding upon the two parties to the dispute unless the two parties mutually agree that the decision shall be advisory. Arbitration 

shall occur according to the following terms: 

(a) An Arbitration Board shall consist of a Chairman and two other members, each of whom shall be a citizen of a party to the dispute. Each of the two 

Governments that is a party to the dispute shall appoint one member to the 

Arbitration Board. If either party to the dispute does not fulfill the appointment 

requirements of this section within 30 days of referral of the dispute to arbitration pursuant to section 423, its member on the Arbitration Board shall be selected from its own standing list by the other party to the dispute. Each Government shall maintain a standing list of 10 candidates. The parties to the dispute shall jointly appoint a Chairman within 15 days after selection of the other 

members of the Arbitration Board. Failing agreement on a Chairman, the 

Chairman shall be chosen by lot from the standing lists of the parties to the 

dispute within 5 days after such failure. 

(b) Unless otherwise provided in this Compact, as amended, or its related 

agreements, the Arbitration Board shall have jurisdiction to hear and render its 

final determination on all disputes arising exclusively under Articles I, II, III, 

IV and V of Title One, Title Two, Title Four, and their related agreements. 

(c) Each member of the Arbitration Board shall have one vote. Each decision of the Arbitration Board shall be reached by majority vote. 

(d) In determining any legal issue, the Arbitration Board may have reference to international law and, in such reference, shall apply as guidelines the 

68

provisions set forth in Article 38 of the Statute of the International Court of 

Justice. 

(e) The Arbitration Board shall adopt such rules for its proceedings as it 

may deem appropriate and necessary, but such rules shall not contravene the 

provisions of this Compact, as amended. Unless the parties provide otherwise 

by mutual agreement, the Arbitration Board shall endeavor to render its decision within 30 days after the conclusion of arguments. The Arbitration Board 

shall make findings of fact and conclusions of law and its members may issue 

dissenting or individual opinions. Except as may be otherwise decided by the 

Arbitration Board, one-half of all costs of the arbitration shall be borne by the 

Government of the United States and the remainder shall be borne by the Government of the Republic of the Marshall Islands. 

Article III 

Amendment 

Section 431

The provisions of this Compact, as amended, may be further amended by mutual agreement of the Government of the United States and the Government of the 

Republic of the Marshall Islands, in accordance with their respective constitutional 

processes. 

Article IV 

Termination 

Section 441

This Compact, as amended, may be terminated by mutual agreement of the 

Government of the Republic of the Marshall Islands and the Government of the 

United States, in accordance with their respective constitutional processes. Such 

mutual termination of this Compact, as amended, shall be without prejudice to the 

continued application of section 451 of this Compact, as amended, and the provisions of the Compact, as amended, set forth therein. 

Section 442

Subject to section 452, this Compact, as amended, may be terminated by the 

Government of the United States in accordance with its constitutional processes. 

Such termination shall be effective on the date specified in the notice of termination 

by the Government of the United States but not earlier than six months following 

delivery of such notice. The time specified in the notice of termination may be extended. Such termination of this Compact, as amended, shall be without prejudice 

to the continued application of section 452 of this Compact, as amended, and the 

provisions of the Compact, as amended, set forth therein. 

Section 443

This Compact, as amended, shall be terminated by the Government of the Republic of the Marshall Islands, pursuant to its constitutional processes, subject to 

section 453 if the people represented by that Government vote in a plebiscite to terminate the Compact. The Government of the Republic of the Marshall Islands shall 

notify the Government of the United States of its intention to call such a plebiscite, 

which shall take place not earlier than three months after delivery of such notice. 

The plebiscite shall be administered by the Government of the Republic of the Marshall Islands in accordance with its constitutional and legislative processes, but the 

Government of the United States may send its own observers and invite observers 

from a mutually agreed party. If a majority of the valid ballots cast in the plebiscite 

favors termination, the Government of the Republic of the Marshall Islands shall, 

upon certification of the results of the plebiscite, give notice of termination to the 

Government of the United States, such termination to be effective on the date specified in such notice but not earlier than three months following the date of delivery 

of such notice. The time specified in the notice of termination may be extended. 

Article V 

Survivability 

Section 451

(a) Should termination occur pursuant to section 441, economic and other assistance by the Government of the United States shall continue only if and as mutually 

agreed by the Governments of the United States and the Republic of the Marshall 

Islands, and in accordance with the countries’ respective constitutional processes. 

69

(b) In view of the special relationship of the United States and the Republic of 

the Marshall Islands, as reflected in subsections (b) and (c) of section 354 of this 

Compact, as amended, and the separate agreement entered into consistent with 

those subsections, if termination occurs pursuant to section 441 prior to the twentieth anniversary of the effective date of this Compact, as amended, the United 

States shall continue to make contributions to the Trust Fund described in section 

216 of this Compact, as amended. 

(c) In view of the special relationship of the United States and the Republic of 

the Marshall Islands described in subsection (b) of this section, if termination occurs 

pursuant to section 441 following the twentieth anniversary of the effective date of 

this Compact, as amended, the Republic of the Marshall Islands shall be entitled 

to receive proceeds from the Trust Fund described in section 216 of this Compact, 

as amended, in the manner described in those provisions and the Trust Fund Agreement. 

Section 452

(a) Should termination occur pursuant to section 442 prior to the twentieth anniversary of the effective date of this Compact, as amended, the following provisions 

of this amended Compact shall remain in full force and effect until the twentieth 

anniversary of the effective date of this Compact, as amended, and thereafter as 

mutually agreed: 

(1) Article VI and sections 172, 173, 176 and 177 of Title One; 

(2) Article One and sections 232 and 234 of Title Two; 

(3) Title Three; and 

(4) Articles II, III, V and VI of Title Four. 

(b) Should termination occur pursuant to section 442 before the twentieth anniversary of the effective date of this Compact, as amended:

(1) Except as provided in paragraph (2) of this subsection and subsection 

(c) of this section, economic and other assistance by the United States shall continue only if and as mutually agreed by the Governments of the United States 

and the Republic of the Marshall Islands. 

(2) In view of the special relationship of the United States and the Republic 

of the Marshall Islands, as reflected in subsections (b) and (c) of section 354 of 

this Compact, as amended, and the separate agreement regarding mutual security, and the Trust Fund Agreement, the United States shall continue to make 

contributions to the Trust Fund described in section 216 of this Compact, as 

amended, in the manner described in the Trust Fund Agreement. 

(c) In view of the special relationship of the United States and the Republic of 

the Marshall Islands, as reflected in subsections 354(b) and (c) of this Compact, as 

amended, and the separate agreement regarding mutual security, and the Trust 

Fund Agreement, if termination occurs pursuant to section 442 following the twentieth anniversary of the effective date of this Compact, as amended, the Republic 

of the Marshall Islands shall continue to be eligible to receive proceeds from the 

Trust Fund described in section 216 of this Compact, as amended, in the manner 

described in those provisions and the Trust Fund Agreement. 

Section 453

(a) Should termination occur pursuant to section 443 prior to the twentieth anniversary of the effective date of this Compact, as amended, the following provisions 

of this Compact, as amended, shall remain in full force and effect until the twentieth anniversary of the effective date of this Compact, as amended, and thereafter 

as mutually agreed: 

(1) Article VI and sections 172, 173, 176 and 177 of Title One; 

(2) Sections 232 and 234 of Title Two; 

(3) Title Three; and 

(4) Articles II, III, V and VI of Title Four. 

(b) Upon receipt of notice of termination pursuant to section 443, the Government of the United States and the Government of the Republic of the Marshall Islands shall promptly consult with regard to their future relationship. Except as provided in subsections (c) and (d) of this section, these consultations shall determine 

the level of economic and other assistance, if any, which the Government of the 

United States shall provide to the Government of the Republic of the Marshall Islands for the period ending on the twentieth anniversary of the effective date of this 

Compact, as amended, and for any period thereafter, if mutually agreed. 

(c) In view of the special relationship of the United States and the Republic of 

the Marshall Islands, as reflected in subsections 354(b) and (c) of this Compact, as 

amended, and the separate agreement regarding mutual security, and the Trust 

Fund Agreement, if termination occurs pursuant to section 443 prior to the twentieth anniversary of the effective date of this Compact, as amended, the United 

70

States shall continue to make contributions to the Trust Fund described in section 

216 of this Compact, as amended. 

(d) In view of the special relationship of the United States and the Republic of 

the Marshall Islands, as reflected in subsections 354(b) and (c) of this Compact, as 

amended, and the separate agreement regarding mutual security, and the Trust 

Fund Agreement, if termination occurs pursuant to section 443 following the twentieth anniversary of the effective date of this Compact, as amended, the Republic 

of the Marshall Islands shall continue to be eligible to receive proceeds from the 

Trust Fund described in section 216 of this Compact, as amended, in the manner 

described in those provisions and the Trust Fund Agreement. 

Section 454

Notwithstanding any other provision of this Compact, as amended: 

(a) The Government of the United States reaffirms its continuing interest 

in promoting the economic advancement and budgetary self-reliance of the people of the Republic of the Marshall Islands. 

(b) The separate agreements referred to in Article II of Title Three shall 

remain in effect in accordance with their terms. 

Article VI 

Definition of Terms 

Section 461

For the purpose of this Compact, as amended, only, and without prejudice to 

the views of the Government of the United States or the Government of the Republic of the Marshall Islands as to the nature and extent of the jurisdiction of either 

of them under international law, the following terms shall have the following meanings: 

(a) ‘‘Trust Territory of the Pacific Islands’’ means the area established in 

the Trusteeship Agreement consisting of the former administrative districts of 

Kosrae, Yap, Ponape, the Marshall Islands and Truk as described in Title One, 

Trust Territory Code, section 1, in force on January 1, 1979. This term does not 

include the area of Palau or the Northern Mariana Islands. 

(b) ‘‘Trusteeship Agreement’’ means the agreement setting forth the terms 

of trusteeship for the Trust Territory of the Pacific Islands, approved by the Security Council of the United Nations April 2, 1947, and by the United States 

July 18, 1947, entered into force July 18, 1947, 61 Stat. 3301, T.I.A.S. 1665, 8 

U.N.T.S. 189. 

(c) ‘‘The Republic of the Marshall Islands’’ and ‘‘the Federated States of Micronesia’’ are used in a geographic sense and include the land and water areas 

to the outer limits of the territorial sea and the air space above such areas as 

now or hereafter recognized by the Government of the United States. 

(d) ‘‘Compact’’ means the Compact of Free Association Between the United 

States and the Federated States of Micronesia and the Marshall Islands, that 

was approved by the United States Congress in section 201 of Public Law 99–

239 (Jan. 14, 1986) and went into effect with respect to the Republic of the Marshall Islands on October 21, 1986. 

(e) ‘‘Compact, as amended’’ means the Compact of Free Association Between 

the United States and the Republic of the Marshall Islands, as amended. The 

effective date of the Compact, as amended, shall be on a date to be determined 

by the President of the United States, and agreed to by the Government of the 

Republic of the Marshall Islands, following formal approval of the Compact, as 

amended, in accordance with section 411 of this Compact, as amended. 

(f) ‘‘Government of the Republic of the Marshall Islands’’ means the Government established and organized by the Constitution of the Republic of the Marshall Islands including all the political subdivisions and entities comprising that 

Government. 

(g) ‘‘Government of the Federated States of Micronesia’’ means the Government established and organized by the Constitution of the Federated States of 

Micronesia including all the political subdivisions and entities comprising that 

Government. 

(h) The following terms shall be defined consistent with the 1978 Edition 

of the Radio Regulations of the International Telecommunications as follows: 

(1) ‘‘Radiocommunication’’ means telecommunication by means of radio 

waves. 

(2) ‘‘Station’’ means one or more transmitters or receivers or a combination of transmitters and receivers, including the accessory equipment, necVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00070 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
71

essary at one location for carrying on a radiocommunication service, or the 

radio astronomy service. 

(3) ‘‘Broadcasting Service’’ means a radiocommunication service in 

which the transmissions are intended for direct reception by the general 

public. This service may include sound transmissions, television transmissions or other types of transmission. 

(4) ‘‘Broadcasting Station’’ means a station in the broadcasting service. 

(5) ‘‘Assignment (of a radio frequency or radio frequency channel)’’ 

means an authorization given by an administration for a radio station to 

use a radio frequency or radio frequency channel under specified conditions. 

(6) ‘‘Telecommunication’’ means any transmission, emission or reception 

of signs, signals, writings, images and sounds or intelligence of any nature 

by wire, radio, optical or other electromagnetic systems. 

(i) ‘‘Military Areas and Facilities’’ means those areas and facilities in the 

Republic of the Marshall Islands reserved or acquired by the Government of the 

Republic of the Marshall Islands for use by the Government of the United 

States, as set forth in the separate agreements referred to in section 321. 

(j) ‘‘Tariff Schedules of the United States’’ means the Tariff Schedules of the 

United States as amended from time to time and as promulgated pursuant to 

United States law and includes the Tariff Schedules of the United States Annotated (TSUSA), as amended. 

(k) ‘‘Vienna Convention on Diplomatic Relations’’ means the Vienna Convention on Diplomatic Relations, done April 18, 1961, 23 U.S.T. 3227, T.I.A.S. 

7502, 500 U.N.T.S. 95. 

Section 462

(a) The Government of the United States and the Government of the Republic 

of the Marshall Islands previously have concluded agreements, which shall remain 

in effect and shall survive in accordance with their terms, as follows: 

(1) Agreement Between the Government of the United States and the Government of the Marshall Islands for the Implementation of Section 177 of the 

Compact of Free Association; 

(2) Agreement Between the Government of the United States and the Government of the Marshall Islands by Persons Displaced as a Result of the United 

States Nuclear Testing Program in the Marshall Islands; 

(3) Agreement Between the Government of the United States and the Government of the Marshall Islands Regarding the Resettlement of Enjebi Island; 

(4) Agreement Concluded Pursuant to Section 234 of the Compact; and 

(5) Agreement Between the Government of the United States and the Government of the Marshall Islands Regarding Mutual Security Concluded Pursuant to Sections 321 and 323 of the Compact of Free Association. 

(b) The Government of the United States and the Government of the Republic 

of the Marshall Islands shall conclude prior to the date of submission of this Compact to the legislatures of the two countries, the following related agreements which 

shall come into effect on the effective date of this Compact, as amended, and shall 

survive in accordance with their terms, as follows: 

(1) Federal Programs and Services Agreement Between the Government of 

the United States of America and the Government of the Republic of the Marshall Islands Concluded Pursuant to Article III of Title One, Article II of Title 

Two (including Section 222), and Section 231 of the Compact of Free Association, as Amended, which include: 

(i) Postal Services and Related Programs; 

(ii) Weather Services and Related Programs; 

(iii) Civil Aviation Safety Service and Related Programs; 

(iv) Civil Aviation Economic Services and Related Programs; 

(v) United States Disaster Preparedness and Response Services and Related Programs; and 

(vi) Telecommunications Services and Related Programs. 

(2) Agreement Between the Government of the United States of America 

and the Government of the Republic of the Marshall Islands on Extradition, 

Mutual Assistance in Law Enforcement Matters and Penal Sanctions Concluded 

Pursuant to Section 175 (a) of the Compact of Free Association, as Amended; 

(3) Agreement Between the Government of the United States of America 

and the Government of the Republic of the Marshall Islands on Labor Recruitment Concluded Pursuant to Section 175 (b) of the Compact of Free Association, 

as Amended; 

(4) Agreement Concerning Procedures for the Implementation of United 

States Economic Assistance Provided in the Compact, as Amended, of Free AsVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00071 Fmt 6621 Sfmt 6621 E:\HR\OC\HR262P1.XXX HR262P1
72

sociation Between the Government of the United States of America and the 

Government of the Republic of the Marshall Islands; 

(5) Agreement Between the Government of the United States of America 

and the Government of the Republic of the Marshall Islands Implementing Section 216 and Section 217 of the Compact, as Amended, Regarding a Trust Fund; 

(6) Agreement Regarding the Military Use and Operating Rights of the 

Government of the United States in the Republic of the Marshall Islands Concluded Pursuant to Sections 321 and 323 of the Compact of Free Association, 

as Amended; and, 

(7) Status of Forces Agreement Between the Government of the United 

States of America and the Government of the Republic of the Marshall Islands 

Concluded Pursuant to Section 323 of the Compact of Free Association, as 

Amended. 

Section 463

(a) Except as set forth in subsection (b) of this section, any reference in this 

Compact, as amended, to a provision of the United States Code or the Statutes at 

Large of the United States constitutes the incorporation of the language of such provision into this Compact, as amended, as such provision was in force on the effective 

date of this Compact, as amended. 

(b) Any reference in Article IV and VI of Title One, and Sections 174, 175, 178 

and 342 to a provision of the United States Code or the Statutes at Large of the 

United States or to the Privacy Act, the Freedom of Information Act, the Administrative Procedure Act or the Immigration and Nationality Act constitutes the incorporation of the language of such provision into this Compact, as amended, as such 

provision was in force on the effective date of this Compact, as amended, or as it 

may be amended thereafter on a non-discriminatory basis according to the constitutional processes of the United States. 

Article VII 

Concluding Provisions 

Section 471

Both the Government of the United States and the Government of the Republic 

of the Marshall Islands shall take all necessary steps, of a general or particular 

character, to ensure, no later than the entry into force date of this Compact, as 

amended, the conformity of its laws, regulations and administrative procedures with 

the provisions of this Compact, as amended, or, in the case of subsection (d) of section 141, as soon as reasonably possible thereafter. 

Section 472

This Compact, as amended, may be accepted, by signature or otherwise, by the 

Government of the United States and the Government of the Republic of the Marshall Islands. 

IN WITNESS WHEREOF, the undersigned, duly authorized, have signed this 

Compact of Free Association, as amended, which shall enter into force upon the exchange of diplomatic notes by which the Government of the United States of America and the Government of the Republic of the Marshall Islands inform each other 

about the fulfillment of their respective requirements for entry into force. 

DONE at Majuro, Republic of the Marshall Islands, in duplicate, this thirtieth 

(30) day of April, 2003, each text being equally authentic.

PURPOSE AND SUMMARY

House Joint Resolution 63, the Compact of Free Association 

Amendments Act of 2003, is the authorizing and implementing legislation for the amended Compacts of Free Association that the 

United States recently has renegotiated with the Federated States 

of Micronesia (FSM) and the Republic of the Marshall Islands 

(RMI). Critical portions of the original Compact of Free Association 

with those countries are set to expire at the end of Fiscal Year 

2003. As described in greater detail below, the legislation secures 

certain U.S. defense interests and supports those countries’ development and movement toward budgetary self-sufficiency. Among 

other things, H.J. Res. 63: (1) extends U.S. financial and program 

assistance to those island nations, but fundamentally restructures 

73

the way it is provided, to increase fiscal accountability and economic planning; (2) prepares for the end of U.S. grant assistance 

in 2023 by capitalizing a trust fund for each nation; (3) secures certain U.S. strategic interests, such as the U.S. ‘‘defense veto’’ and 

extended U.S. access to the Kwajalein atoll missile testing range; 

and (4) modifies and clarifies the unique U.S. immigration status 

enjoyed by FSM and RMI citizens, to address concerns primarily 

related to U.S. homeland security. 

BACKGROUND AND NEED FOR THE LEGISLATION

The United States has shared a unique relationship with the 

peoples of Micronesia and the Marshall Islands for the past halfcentury. For almost 40 years after World War II, the United States 

administered both Micronesia and the Marshall Islands (along with 

Palau and the Northern Mariana Islands) as part of the United 

Nations Trust Territory of the Pacific Islands. In the Marshall Islands, the United States conducted both underwater and atmospheric nuclear tests (at Bikini and Enewetok) during the 1940’s 

and 1950’s, and has maintained a U.S. Army base and missile test 

range at Kwajalein atoll since 1964. 

In 1986, Micronesia and the Marshall Islands chose to become 

sovereign states. The Federated States of Micronesia (FSM), which 

has a current population of about 136,000, is a grouping of 607 

small islands (with a total land mass of 270 square miles) stretched 

across more than one million square miles of the Western Pacific. 

The Republic of the Marshall Islands (RMI), which has a population of about 74,000, consists of more than 1,100 islands (with a 

total land area of about 70 miles) stretched across 750,000 miles 

of the Central Pacific. The FSM and RMI entered into a Compact 

of Free Association with the United States that was intended to ensure self-government for the new island nations, to assist them in 

their economic development towards self-sufficiency, and to secure 

certain national security rights for the parties. The United States’ 

unique and close relationship with the FSM and the RMI has continued under the Compact, with those nations acting as stalwart 

U.S. allies in the United Nations General Assembly, and with a 

significant number of Micronesians and Marshallese serving honorably in the United States Armed Forces, including in the war in 

Iraq. 

On the defense front, the original Compact obligates the United 

States to defend the FSM and RMI. It also grants the U.S. the 

right of ‘‘strategic denial’’ (i.e., the right to prevent access to the islands and their territorial waters by the militaries of other countries) as well as a ‘‘defense veto’’ (the right to veto FSM or RMI actions that the U.S. deems incompatible with its defense responsibilities). In addition, a Compact-related agreement secured U.S. 

rights to the Kwajalein missile testing facility until 2016. 

In terms of economic and development assistance, the original 

Compact provided for 15 years of direct U.S. financial payments to 

Micronesia and the Marshall Islands (as well as a 2-year extension 

during negotiations for future assistance). It also authorized them 

to receive various forms of program assistance and services from 

U.S. Federal agencies. In addition, it allowed FSM and RMI citizens to live, work, and study in the U.S. as resident aliens, without 

74

passports or visas. The countries remain dependent on U.S. funds, 

though to a lesser extent than at the inception of the Compact. 

During the term of the first Compact, poor planning, mismanagement, and misuse of Compact funds (exacerbated by a lack of effective oversight by U.S. Government agencies) impaired the countries’ movement toward economic development and self-sufficiency. 

The original Compact also included a full and final settlement of 

all compensation claims regarding U.S. nuclear tests in the Marshall Islands, but also allowed the Marshallese to petition Congress 

for additional compensation on the basis of ‘‘changed circumstances.’’ Such a petition was submitted in September 2000, 

and is currently under review by Executive branch agencies with 

relevant expertise. 

Under the original Compact, U.S. financial assistance and the 

‘‘defense veto’’ were set to expire in 2001, but could be continued 

for an additional 2 years while the nations renegotiated the expiring provisions. The U.S. and the two island nations began renegotiating those provisions in the fall of 1999. 

During the past 3 years, the Committee has actively conferred 

with the State Department’s Office of Compact Negotiation, the 

U.S. General Accounting Office, Congressional committees of jurisdiction, and the governments of the FSM and the RMI, both to review the implementation and efficacy of the original Compact and 

to monitor the Compact renegotiation. In the spring of 2003, the 

parties finalized revised Compacts of Free Association (a separate 

U.S. Compact with the FSM and another with the RMI), which are 

included in the body of H.J. Res. 63. 

H.J. Res. 63 and the amended Compacts are a significant improvement upon the original Compact package and address the key 

issues raised in Congressional oversight hearings and GAO reports 

of recent years. 

Annual grant assistance under the amended Compacts is structured to ensure better oversight and planning than occurred under 

the original Compact. Instead of direct cash transfers, funds under 

the new Compacts will be disbursed as sector grants targeted to 

priority areas such as health, education, and infrastructure. New 

fiscal procedures agreements increase reporting and planning requirements, and establish a Joint Economic Management Committee in each country, to which the United States appoints a majority of the members. Furthermore, the new Compacts allow the 

U.S. to withhold funds if either country fails to comply with grant 

conditions or to cooperate in misuse-of-funds investigations. 

The new Compacts also anticipate an end to U.S. annual funding 

by capitalizing a trust fund for each country that eventually will 

provide an income stream after U.S. grant assistance ends in 2023. 

During each year of the new Compact payments, the grant funding 

decreases, and the trust fund contribution increases by a commensurate amount. The new Compacts also grant the U.S. effective 

control over management of those trust funds. 

The new Compacts provide for annual grant assistance over the 

20-year period from 2004 to 2023, with the FSM receiving roughly 

$92 million per year, and the RMI approximately $57 million ($42 

million in Compact funds plus $15 million for Kwajalein compensation, as discussed below). Additional future assistance to the MarVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00074 Fmt 6621 Sfmt 6601 E:\HR\OC\HR262P1.XXX HR262P1
75

shall Islands is possible if the United States extends its military 

access to Kwajalein Atoll (as discussed below). H.J. Res. 63 also includes $15 million per year in ‘‘Compact impact’’ funding to be apportioned among U.S. jurisdictions (such as Hawaii, Guam, and the 

Commonwealth of the Northern Mariana Islands) that bear the 

health and social services costs associated with out-migration from 

the FSM and RMI under the Compacts. 

Although U.S. military access to Kwajalein does not expire until 

2016, the RMI and the U.S. also took the Compact renegotiation 

as an opportunity to negotiate an extension of the Kwajalein lease, 

given that the Kwajalein site likely will remain important for U.S. 

missile defense testing beyond the current term. The new agreement extends U.S. use by an additional 50 years (from 2016 to 

2066), with an option to extend for an additional 20 years (to 2086), 

and includes a mechanism for early termination. Annual compensation for Kwajalein use will increase to $15 million (from the current level of $11.3 million), and then to $18 million per year beginning in 2014. 

Although it was not set to expire, the unique U.S. immigration 

status enjoyed by FSM and RMI citizens is tightened in the new 

Compacts, largely at the insistence of the U.S. Department of 

Homeland Security. The new Compacts: (1) require that FSM and 

RMI citizens have a valid passport in order to be admitted to the 

U.S.; (2) deny the special Compact immigration status to naturalized citizens of those countries; (3) deny the special status to children traveling from those countries to the U.S. for adoption; and 

(4) affirm the authority of the U.S. Attorney General to promulgate 

regulations that might condition the admission of FSM and RMI 

citizens to the United States. 

During Committee consideration of H.J. Res. 63, concerns were 

raised about the non-payment of certain judgments in favor of 

United States citizens by courts of the Federated States of Micronesia, which are discussed in the Additional Views section of this 

report, below. 

On July 8, 2003, the Chairmen and Ranking Members of the 

International Relations Committee, the International Relations 

Subcommittee on Asia and the Pacific, and the Committee on Resources introduced H.J. Res. 63 at the request of the Administration. Since then, the International Relations Committee has expedited its consideration of this legislation, given the prospective expiration of critical provisions of the original Compact at the end of 

the current fiscal year. At the same time, the Committee remains 

committed to working with the other committees of jurisdiction to 

make additional modifications to ensure that the FSM and the RMI 

have continued access to certain forms of education assistance and 

disaster relief, which are important to the development goals that 

lie at the heart of the Compacts of Free Association. 

HEARINGS

The Committee’s Subcommittee on Asia and the Pacific held 1 

day of hearings on the amended Compacts of Free Association on 

June 18, 2003. Testimony was received from three witnesses, representing the Department of State, the Department of the Interior, 

76

and the General Accounting Office, with additional material submitted by six individuals and organizations. 

COMMITTEE CONSIDERATION

On July 18, 2003, the Subcommittee on Asia and the Pacific met 

in open session and ordered favorably reported the bill H.J. Res. 

63, as amended, by voice vote, a quorum being present. On July 23, 

2003, the Committee met in open session and ordered favorably reported the bill H.J. Res. 63, with amendment, by voice vote, a 

quorum being present. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

The relevant information required by clause 3(c)(2) of House Rule 

XIII is incorporated in the Congressional Budget Office Cost Estimate, below. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.J. Res. 63, the following estimate and comparison prepared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget Act of 1974:

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, September 2, 2003. 

Hon. HENRY J. HYDE, Chairman, 

Committee on International Relations, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed estimate for H.J. Res. 63, the Compact of Free 

Association Amendments Act of 2003. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford, who 

can be reached at 226–2860. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN

Enclosure

cc: Honorable Tom Lantos 

Ranking Member 

77

H.J. Res. 63—Compact of Free Association Amendments Act of 

2003. 

SUMMARY

H.J. Res. 63 would amend the Compact of Free Association Act 

of 1988 and subsidiary agreements between the United States and 

the Republic of the Marshall Islands (RMI) and the Federated 

States of Micronesia (FSM). The compacts with RMI and FSM, together with the subsidiary agreements, govern the political, economic, and military relationship between the United States and 

these two freely associated states. Although the compact does not 

expire, certain provisions that authorized federal funding for RMI 

and FSM expired in 2001. The compact provides that expired provisions be extended until 2003 if negotiations to renew the compact 

had not concluded by 2001. 

H.J. Res. 63 would provide financial assistance for RMI and FSM 

for the next 20 years. H.J. Res. 63 would make several changes to 

the compact to increase monitoring of financial assistance, create 

a joint oversight committee, and establish trust funds to provide 

funds to RMI and FSM beyond 2023. The legislation also would 

provide $15 million a year for costs related to the migration of RMI 

and FSM nationals to other jurisdictions. 

Consistent with the baseline construction rules in the Balanced 

Budget and Emergency Deficit Control Act, CBO’s baseline assumes that direct spending for grants to the RMI and FSM will 

continue over the 2004–2013 period—beyond the scheduled expiration date—at an average annual cost of $157 million a year. We estimate that enacting this legislation would increase direct spending 

by around $13 million a year above the amounts assumed in our 

baseline projections. Thus, CBO estimates that enacting H.J. Res. 

63 would increase direct spending by $131 million over the 2004–

2013 period. 

In addition, the resolution also would extend the authority to 

provide certain federal services for RMI and FSM for the next 20 

years. CBO estimates that continuing those federal services would 

cost $640 million over the 2004–2013 period, subject to appropriation of the necessary amounts. 

H.J. Res. 63 contains intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA), but the costs would 

be significantly below the threshold established in UMRA ($59 million in 2003, adjusted for inflation). The resolution contains no private-sector mandates as defined in UMRA. 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.J. Res. 63 is shown in the 

following table. The costs of this legislation fall within budget function 800 (general government).

78

By fiscal year, in millions of dollars 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

DIRECT SPENDING

Baseline Spending for Compact of Free Association Under Current Law 

Estimated Budget Authority 156 156 156 156 156 156 158 158 158 158

Estimated Outlays 156 156 156 156 156 156 158 158 158 158

Proposed Changes: 

Estimated Budget Authority 13 14 14 14 14 14 12 12 12 12

Estimated Outlays 13 14 14 14 14 14 12 12 12 12

Spending for Compact of Free Association 

Under H.J. Res. 63

Estimated Budget Authority 169 170 170 170 170 170 170 170 170 170

Estimated Outlays 169 170 170 170 170 170 170 170 170 170

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Federal Program Services for RMI and FSM 

Estimated Authorization Level 60 61 62 64 65 66 68 69 70 72

Estimated Outlays 45 61 62 63 65 66 67 69 70 71

BASIS OF ESTIMATE

For this estimate, CBO assumes that the legislation will be enacted near the start of fiscal year 2004 and that outlays will occur 

at the historical rate for grants to the RMI and FSM. 

Direct Spending 

H.J. Res. 63 would authorize and appropriate federal funds for 

economic assistance to RMI and FSM over the 2004–2023 period. 

Grant assistance would be aimed at needs for education, health, infrastructure, private-sector development, and the environment. In 

addition, the resolution would establish trust funds for RMI and 

FSM involving annual contributions for 20 years by RMI, FSM, 

and the federal government. Those trust funds are aimed at providing funds to RMI and FSM after federal grant assistance expires 

under the bill in 2023. 

CBO estimates that enacting the legislation would cost $1.7 billion over the 2004–2013 period. However, consistent with the Balanced Budget and Emergency Deficit Control Act, which specifies 

that certain expiring provisions should be assumed to continue for 

budget projection purposes, CBO’s baseline projects budget authority for payments to RMI and FSM will total $1.6 billion over the 

2004–2013 period. Thus, we estimate H.J. Res. 63 would provide 

an increase in direct spending of $134 million above the baseline 

over the 2004–2013 period. The following paragraphs discuss the financial assistance that would be provided by this legislation. 

Republic of the Marshall Islands. Over the 2004–2013 period, 

H.J. Res. 63 would provide RMI with grants of $339 million in 

grants, $94 million in trust fund contributions, $152 million for 

U.S. defense operations on the Kwajalein Atoll, and $27 million to 

compensate for the Kwajalein landholders and RMI for the use of 

its territory by the U.S. military. 

Federated States of Micronesia. Over the 2004–2013 period, H.J. 

Res. 63 would provide FSM with grants of $755 million and $185 

million in trust fund contributions. 

79

General Assistance. In addition, the legislation would provide $15 

million a year for health, education, social, and infrastructure costs 

associated with the migration of RMI and FSM nationals to other 

jurisdictions. The jurisdictions that would likely receive these funds 

include Hawaii, Guam, American Samoa, and the Commonwealth 

of the Northern Mariana Islands. CBO estimates general assistance would cost $150 million over the 2004–2013 period. 

H.J. Res. 63 would also continue to make available services currently provided by the U.S. Postal Service (USPS) and Federal Deposit Insurance Corporation (FDIC). Spending by these agencies is 

generally not subject to the annual appropriations process. Based 

on information from the Office of Insular Affairs, CBO expects that 

mail service to RMI and FSM costs USPS approximately $1 million 

annually and this cost is reimbursed by the Department of the Interior, subject to the availability of appropriations. In addition, 

CBO expects costs to the FDIC for continuing to insure deposits in 

the Bank of the Federated States of Micronesia would be offset by 

fees assessed on the industry, resulting in no net cost to the federal 

government. 

Spending Subject to Appropriation 

CBO cannot identify the amounts allocated to RMI and FSM 

from 2003 federal agency appropriations. Based on historical 

spending for RMI and FSM, however, we estimate that 2003 discretionary spending for these freely associated states is about $60 million. 

H.J. Res. 63 also would specifically extend the authority to continue services provided by the U.S. Weather Service, Federal Aviation Administration, the Departments of Transportation and Homeland Security, and the Agency for International Development to 

RMI and FSM. Based on Information from the Departments of 

State and the Interior, and the General Accounting Office (GAO), 

CBO estimates that continuing those programs for RMI and FSM 

would cost approximately $10 million annually, assuming the appropriation of the necessary amounts. 

Other federal agencies currently providing programs and services 

to the RMI and FSM include the Departments of Labor, Education, 

Agriculture, and Health and Human Services. Most of this assistance is provided through those agencies’ annual appropriations. 

Based on information from GAO and the Departments of State and 

the Interior, CBO estimates that these other programs and services 

for RMI and FSM currently cost about $50 million a year. Section 

109 authorizes appropriations to continue federal services and programs to RMI and FSM, so these costs are included in this cost estimate. 

ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

H.J. Res. 63 contains intergovernmental mandates as defined in 

UMRA because it would explicitly prohibit states from taxing revenue generated by the trust fund established in the bill and from 

treating the fund as anything other than a nonprofit corporation. 

The costs of complying with these prohibitions would total no more 

than $2 million over the 2004–2008 period, falling significantly 

below the threshold established in UMRA ($59 million in 2003, adVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00079 Fmt 6621 Sfmt 6601 E:\HR\OC\HR262P1.XXX HR262P1
80

justed for inflation). If H.J. Res. 63 were enacted, affected jurisdictions, including Hawaii, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, would continue to 

incur costs for services to migrants; however, such costs are not the 

result of enforceable duties imposed by the federal government. 

The joint resolution would authorize $15 million per year to offset 

these impacts, but data from the jurisdictions and GAO suggest the 

cost may be substantially higher. 

ESTIMATED IMPACT ON THE PRIVATE SECTOR

H.J. Res. 63 contains no private-sector mandates as defined in 

UMRA. 

ESTIMATE PREPARED BY: 

Federal Costs: Matthew Pickford (226–2860) 

Impact on State, Local, and Tribal Governments: Sarah Puro (225–

3220) 

Impact on the Private Sector: Paige Piper/Bach (226–2940) 

ESTIMATE APPROVED BY: 

Peter H. Fontaine 

Deputy Assistant Director for Budget Analysis 

PERFORMANCE GOALS AND OBJECTIVES

H.J. Res. 63 will secure certain U.S. defense rights in the Federated States of Micronesia and the Republic of the Marshall Islands, and will support those countries’ movement towards economic development and budgetary self-reliance, as discussed in 

greater detail in the Background section, above. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, section 8 of the Constitution. 

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

The Preamble has been updated to reflect that the Compact, as 

amended, now consists of two separate Compacts with the Republic 

of the Marshall Islands (RMI) and the Federated States of Micronesia (FSM), respectively. 

TITLE I—APPROVAL, INTERPRETATION, AND U.S. POLICIES REGARDING

THE AMENDED COMPACTS; SUPPLEMENTAL PROVISIONS

Sec. 101—Approval of Amended Compacts; References to Subsidiary 

Agreements 

Sec. 101(a) Federated States of Micronesia—Notes the existence 

of a separate Compact, as amended, between the United States and 

the Federated States of Micronesia (the ‘‘U.S.–FSM Compact’’). 

Sec. 101(b) Republic of the Marshall Islands—Notes the existence 

of a separate Compact, as amended, between the United States and 

the Republic of the Marshall Islands (the ‘‘U.S.–RMI Compact’’). 

81

Sec. 101(c) References to the Compacts and Subsidiary Agreements—Defines and updates terms of reference to reflect the existence of the two separate Compacts referred to above and to provide 

definitions for the terms ‘‘subsidiary’’ or ‘‘separate’’ agreements. 

Sec. 101(d) Amendment, Change, or termination of Compacts and 

Agreements—Requires that any changes or amendments to either 

of the two Compacts, or to certain subsidiary agreements (or portions), be approved through an Act of Congress. 

Sec. 101(e) Subsidiary Agreements Deemed Bilateral—States that 

the one trilateral subsidiary agreement that is not being amended 

(relating to the transfer of title of U.S. Government property situated in the former Trust Territory of the Pacific Islands) shall be 

deemed bilateral, reflecting the newly separate Compacts. 

Sec. 101(f) Entry Into Force of Future Amendments to Subsidiary 

Agreements—Provides generally that (except for those agreements 

identified in section 101(d), which require an Act of Congress for 

modification) no changes to any subsidiary agreement may be made 

without prior notification and explanation to both Houses of Congress. 

Sec. 102—Agreements With Federated States of Micronesia 

Sec. 102(a) Law Enforcement Assistance—Provides generally for 

law enforcement technical and training assistance to the FSM. 

Sec. 102(b) Agreement on Audits—Provides the Comptroller General with authority to audit assistance provided by the United 

States to the FSM under the amended Compacts, and requires the 

FSM to cooperate with the Comptroller General in conducting such 

audits. 

Sec. 103—Agreements With and Other Provisions Related to the Republic of the Marshall Islands 

Sec. 103(a) Law Enforcement Assistance—This subsection provides generally for technical and training assistance to the RMI in 

the area of law enforcement. 

Sec. 103(b) Ejit—Repeats the language from Public Law 99–239 

(regarding assurances that Bikini residents will have access to 

lands on Ejit island until Bikini—the site of past US nuclear 

tests—is restored and habitable), but adds a new paragraph noting 

that the United States and the RMI entered into an agreement in 

furtherance of paragraphs (1) through (3) of this subsection on July 

21, 1986. 

Sec. 103(c) Section 177 Agreement—Repeats the language from 

Public Law 99–239 regarding U.S. payment of nuclear claims compensation, but adds a new paragraph (6) stating that the United 

States made the payment called for under paragraph (1) of this 

subsection. 

Sec. 103(d) Nuclear Test Effects—Repeats the language from 

Public Law 99–239 regarding compensation to Bikini, Enewetak, 

Rongelap, and Utrik for nuclear test effects, and notes that this 

section does not create any rights or obligations beyond those in 

the original statutory language. 

Sec. 103(e) Espousal Provisions—Repeats Congress’s intent that 

section 177 of the original Compact and the separate agreement entered into thereunder constitute a full and final settlement of all 

82

nuclear compensation claims (described in articles X and XI of that 

separate agreement). A new paragraph (3) has been added, noting 

that the specified compensation amounts have been paid. 

Sec. 103(f) DOE Radiological Health Care Program; USDA Agricultural and Food Programs—Repeats and updates the language 

from Public Law 99–239 regarding health care and agricultural 

programs for certain populations affected by U.S. nuclear tests, and 

provides that nothing in this subsection creates any rights or obligations beyond those in the original statutory language. 

Sec. 103(g) Rongelap—Repeats the language of Public Law 99–

239 regarding restoring the habitability of Rongelap , and provides 

that nothing in this subsection creates any rights or obligations beyond those in the original statutory language. 

Sec. 103(h) Four Atoll Health Care Program—Deals with the 

Four Atoll Health Care Program, repeating the language of Public 

Law 99–239 regarding the administration of certain health care 

funds (for Bikini, Enewetak, Rongelap, and Utrik), and provides 

that nothing in this subsection of creates any rights or obligations 

beyond those in the original statutory language. 

Sec. 103(i) Enjebi Community Trust Fund—Deals with the Enjebi 

Community Trust Fund, repeating the language of Public Law 99–

239 regarding the creation and administration of that fund, but 

adding a new paragraph stating that the ex gratia payment provided for has been made and that nothing in this subsection creates any rights or obligations beyond those in the original statutory 

language. 

Sec. 103(j) Bikini Atoll Cleanup—Deals with the cleanup of Bikini Atoll, repeating and updating the language of Public Law 99–

239, and providing that nothing in this subsection creates any 

rights or obligations beyond those in the original statutory language. 

Sec. 103(k) Agreement on Audits—Generally provides the Comptroller General with authority to audit all grants, program assistance, and other assistance provided by the United States to the 

RMI under the amended Compact, and requires the RMI to cooperate with the Comptroller General in conducting such audits. 

Sec. 104—Interpretation of and U.S. Policy Regarding the Amended 

Compacts 

Sec. 104(a) Human Rights—This subsection, which notes and affirms the parties’ commitment to democratic government and respect for human rights, has been updated to reflect the existence 

of the two separate amended Compacts, but is otherwise unchanged from the original statute. 

Sec. 104(b)—Immigration and Passport Security—

Sec. 104(b)(1) Naturalized Citizens—Places restrictions on 

the admission of certain naturalized citizens of the FSM and 

the RMI into the United States under the Compact. While generally similar to the original statute, it contains updated citations to reflect the restrictions on the admission of most naturalized citizens of the FSM and the RMI found in section 141 

of the amended Compacts. 

83

Sec. 104(b)(2) Passports—Directs that $250,000 of the Compact grant funds for each country be used for the development 

of machine-readable and secure FSM and RMI passports. 

Sec. 104(b)(3) Information-Sharing—Provides generally that 

the FSM and the RMI shall share information the United 

States Government deems necessary to enforce the criminal 

and security-related provisions of the Immigration and Nationality Act, as amended. 

Sec. 104(b)(4) Transition; Construction of Sections 141(A)(3) 

and 141(A)(4) of Compacts—Contains a clarification relating to 

the proper implementation of sections 141(a)(3) and (4) of the 

amended Compacts (regarding the grandfathering of certain 

naturalized citizens into the special immigration status enjoyed by FSM and RMI citizens). 

Sec. 104(c) Nonalienation of Lands—Generally repeats the language of Sec. 104(c) of the original statute, which endorses FSM 

and RMI restrictions on the permanent sale of land to non-citizens 

of those countries. 

Sec. 104(d) Nuclear Waste Disposal—Generally repeats the language of Sec. 104(d) of the original statute, which recognizes FSM 

and RMI prohibitions on certain forms of nuclear and toxic waste 

disposal in their countries. 

Sec. 104(e) Effect of Compacts on Certain U.S. Areas; Related Authorization and Continuing Appropriation—Deals with certain adverse effects of migration (from the RMI, FSM, and Palau to the 

U.S.) on the State of Hawaii, Guam, the Commonwealth of the 

Northern Mariana Islands, and America Samoa. This subsection 

authorizes and appropriates $15 million in Compact impact funding per fiscal year from FY 2004 through 2032, allocates it to those 

U.S. jurisdictions by formula, places limitations on the use of any 

such funding, and requires periodic enumerations of FSM, RMI, 

and Palau citizens within those four affected jurisdictions. 

Sec. 104(f) Foreign Loans—Repeats section 104(g) of Public Law 

99–239, reaffirming that the U.S. is not responsible for foreign debt 

contracted by the FSM or RMI. 

Sec. 105—Supplemental Provisions—

Sec. 105(a) Domestic Program Requirements—Generally repeats 

Sec. 105(a) of the original statute, that all U.S. Federal programs 

and services extended to the FSM and RMI remain subject to the 

same criteria, standards, audits, and rules as in the U.S. 

Sec. 105(b)—Relations with the Federated States of Micronesia 

and the Republic of the Marshall Islands—

Sec. 105(b)(1)—Specifies that appropriations made pursuant 

to article I of title two (which includes the major financial sector grants) and section 221(a)(2) of the amended Compacts (regarding U.S. Postal Service), are to be made to the Secretary 

of the Interior. 

Sec. 105(b)(2)—Specifies that certain appropriations made 

for services and programs provided to the FSM and RMI by the 

U.S. Weather Service, Federal Aviation Administration, Department of Transportation, Federal Deposit Insurance Corporation, Federal Emergency Management Agency, and 

84

USAID/Office of Foreign Disaster Assistance, shall be made directly to those agencies. 

Sec. 105(b)(3)—Specifies that appropriations made for certain other Federal services and programs (including the Legal 

Services Corporation, Public Health Service, and Rural Housing Service) shall be made to the relevant agencies in accordance with the terms of any appropriations for such services 

and programs. 

Sec. 105(b)(4)—Requires all Federal agencies providing program and service assistance to the FSM or the RMI to consult 

and coordinate with the Secretaries of State and the Interior 

regarding the provision of any such assistance. 

Sec. 105(b)(5)—Provides that U.S. Government employees in 

either the FSM or the RMI are subject to the authority of the 

United States Chief of Mission. 

Sec. 105(b)(6)—Authorizes the appointment of an Interagency Group on Freely Associated States’ Affairs to provide 

policy guidance to the U.S. Government. 

Sec. 105(b)(7)—Specifies that the three U.S. appointees to 

the Joint Economic Management Committees provided for in 

each of the amended Compacts and Fiscal Procedures Agreements shall be U.S. Government officers or employees. 

Sec. 105(b)(8)—Specifies that the United States voting members of the Trust Fund Committees appointed by the U.S. Government shall be U.S. Government officers or employees. 

Sec. 105(b)(9)—Specifies that the Trust Fund Committees 

provided for in the amended Compacts and Trust Fund Agreements shall be non-profit corporations incorporated under the 

laws of the District of Columbia. 

Sec. 105(c) Continuing Trust Territory Authorization—Repeats 

the content of Sec. 105(c) of the original statute, which deals with 

any continuing authorizations from the Trust Territory period. 

Sec. 105(d) Survivability—Provides for the survivability of certain provisions of this joint resolution (such as those regarding audits) even if the amended Compacts are terminated. 

Sec. 105(e) Noncompliance Sanctions—States that actions by the 

FSM or RMI that are incompatible with U.S. defense authorities 

and responsibilities toward those countries will constitute a material breach of the respective Compact. 

Sec. 105(f) Continuing Programs and Laws—States in paragraph 

(1) that certain programs and services (from the Legal Services 

Corporation, Public Health Service, and Rural Housing Service) be 

made available to the FSM and the RMI, pursuant to section 222 

of the amended Compacts. Paragraph (2) applies the tort claims 

provisions of the amended Compacts to U.S. Government employees and contractors. Paragraph (3) continues eligibility for EPA 

programs for PCB cleanup. 

Sec. 105(g) College of Micronesia—Provides that the College of 

Micronesia shall retain its status as a land-grant institution until 

otherwise provided by Congress or until termination of the amended Compact. 

Sec. 105(h) Trust Territory Debts to U.S. Federal Agencies—Absolves the Governments of the FSM and the RMI from payment of 

85

certain debts of the former Trust Territory Government to U.S. 

Federal agencies. 

Sec. 105(i) Use of DOD Medical Facilities—Requires the Secretary of Defense to make available certain Department of Defense 

medical facilities to properly referred citizens of the FSM and the 

RMI. Generally the same as the original statutory language, but 

updated to reflect the amended Status of Forces Agreement. 

Sec. 105(j) Technical Assistance—Continues the authorization for 

certain U.S. Federal agencies to provide technical assistance at the 

request of the FSM and RMI. 

Sec. 105(k) Prior Service Benefits Program—Authorizes continued 

payments to persons who were eligible to receive payment under 

the Prior Service Benefits Program established during the Trust 

Territory period (due to pre-1968 service for the U.S. Navy or Trust 

Territory Government). 

Sec. 105(l) Indefinite Land Use Payments—Repeats the language 

of the original statute authorizing certain sums to complete repayment by the United States of debts owed for use of various land 

in the FSM and the RMI prior to January 1, 1985. 

Sec. 105(m) Communicable Disease Control Program—Authorizes 

grants for the purposes of dealing with communicable diseases in 

the FSM and RMI. 

Sec. 105(n) User Fees—Requires payment of standard user fees 

for services provided by the United States to persons in the FSM 

and the RMI. 

Sec. 105(o) Treatment of Judgments of FSM, RMI, and Palau 

Courts—Provides that no judgment of an FSM, RMI, or Palau court 

against the United States or its instrumentalities, shall be honored 

by the U.S., unless the judgment is consistent with the U.S. interpretation of international agreements relevant to the judgment. In 

making such a determination, due deference shall be given to assurances made by the Executive Branch to the Congress regarding 

proper interpretation of any such international agreement. 

Section 106—Construction and Contract Assistance—

Authorizes assistance to U.S. firms who may be awarded construction contracts within the FSM or RMI to help them employ 

and train citizens of the FSM and RMI to the extent possible. 

Section 107—Prohibition—

States that the portions of the U.S. Code dealing with criminal 

bribery and conflict of interest apply in full to U.S. employees involved in the Compact negotiations. 

Section 108—Compensatory Adjustments 

Sec. 108(a) Additional Programs and Services—Authorizes the 

provision of certain Federal programs and services (Small Business 

Administration, Economic Development Administration, Rural Utilities Services, Department of Labor/Workforce Investment Act, and 

Department of Commerce/tourism and marine resource programs) 

to the FSM and the RMI. 

Sec. 108(b) Further Amounts—Authorizes the payment, upon an 

adequate showing, of certain sums to the FSM and the RMI as 

compensation for the effects, if any, during the first 15 years folVerDate jul 14 2003 00:55 Sep 05, 2003 Jkt 019006 PO 00000 Frm 00085 Fmt 6621 Sfmt 6601 E:\HR\OC\HR262P1.XXX HR262P1
86

lowing the effective date of the original Compact, of certain Congressional clarifications regarding trade and taxation enacted by 

the Congress in Public Law 99–239. The countries must submit 

any such request by September 30, 2004. 

Sec. 109—Authorization and Continuing Appropriation—

Authorizes and appropriates, through fiscal year 2023 (September 30, 2023), the sums required for grant, trust fund, and 

Kwajalein payments under the amended Compacts. 

Sec. 110—Payment of Citizens of the FSM, RMI, and Palau Employed by the U.S. Government in the Continental U.S.—

Exempts citizens of the FSM, RMI, and Palau from the general 

rule of Section 605 of Public Law 107–67 that U.S. Government 

employees posted within the continental U.S. should be U.S. Citizens (or someone who owes allegiance to the U.S. or falls within 

other defined groups). 

TITLE II—COMPACTS OF FREE ASSOCIATION WITH THE FSM AND THE

RMI

Title II reproduces the amended Compacts between the U.S. and 

the Federated States of Micronesia [Sec. 201(a)] and the Republic 

of the Marshall Islands [Sec. 201(b)], which are discussed below. 

SECTION-BY-SECTION SUMMARY OF THE AMENDED COMPACT OF

FREE ASSOCIATION WITH THE FEDERATED STATES OF MICRONESIA

[SEC. 201(A) OF H.J. RES. 63] 

The Preamble has been updated to reflect that the Federated 

States of Micronesia (FSM) is a sovereign country (not a Trust Territory), that the amended Compacts are now separate (one each 

with the FSM and RMI), and the term ‘‘self-sufficiency’’ has been 

replaced by ‘‘budgetary self-reliance’’ (to reflect the objective that 

the FSM end its reliance on U.S. financial assistance and obtain 

revenues from other legitimate sources). 

TITLE ONE—GOVERNMENTAL RELATIONS

Article I—Self Government 

Sec. 111—States that the people of the FSM are self-governing. 

Article II—Foreign Affairs 

Sec. 121—Affirms the capacity of the Government of the FSM to 

conduct foreign affairs. 

Sec. 122—States that the U.S. will support FSM membership in 

international organizations. 

Sec. 123—States that the U.S. and FSM will consult with each 

other regarding foreign affairs. 

Sec. 124—The U.S. may assist the FSM with foreign affairs when 

requested and mutually agreed. 

Sec. 125—The U.S. cannot be obligated by the FSM’s conduct of 

foreign affairs unless expressly agreed. 

Sec. 126—Makes available U.S. consular services to FSM citizens 

traveling outside the FSM. 

87

Sec. 127—Except as agreed in the amended Compact and related 

agreements, the rights and obligations of the U.S. as Administering 

Authority of the Trust Territory of the Pacific Islands ended on November 2, 1986. 

Article III—Communications 

Sec. 131—States that the FSM has authority to regulate its communications, notes that the FSM elected in 1993 to assume telecommunications functions previously performed by the U.S., and 

grants the U.S. rights to operate telecommunications services within the FSM to the extent necessary to fulfill its obligations under 

the amended Compact. 

Article IV—Immigration 

Sec. 141(a)—Provides that otherwise admissible FSM citizens 

will continue to be eligible for visa-free admission to the U.S. (including territories and possessions) to lawfully engage in occupations and establish residence as nonimmigrants, but now requires 

that they possess valid passports. Subsections (3) and (4) restrict 

the class of naturalized FSM citizens eligible for this special status 

(to address concerns about potential abuse of the special status by 

non-FSM natives). Subsection (5) extends this status to bona fide 

immediate relatives of FSM citizens serving on active duty with the 

U.S. Armed Forces. 

Sec. 141(b)—Provides that FSM children traveling to the U.S. for 

the purpose of being adopted are not eligible for visa-free admission 

under the Compact. This new language is intended to prevent attempted use of Compact privileges to circumvent U.S. immigration 

requirements that help ensure the legitimacy of international adoptions, protect the children involved, and provide the adoptees with 

lawful permanent immigration status. 

Sec. 141(c)—This new language, which declares that no person 

who has purchased FSM citizenship or an FSM passport shall be 

eligible for admission to the U.S. under the amended Compact, is 

intended to remove incentives for passport sales or other abuse. 

Sec. 141(d)—Confirms the existing privilege to work in the U.S. 

and expands the types of documents that FSM citizens can use to 

demonstrate identity and employment authorization under U.S. immigration law. 

Sec. 141(e)—Defines certain terms used in this immigration title. 

Sec. 141(f)—Affirms that (except as specified in Sec. 141(a)) the 

U.S. Immigration and Nationality Act (INA) applies fully to any 

person admitted to the U.S. (or seeking admission to the U.S.) 

under the Compact, and that the U.S. has full authority under the 

INA to regulate the terms and conditions of persons seeking admission under the Compact. 

Sec. 141(g)—Provides that the governments of U.S. territories or 

possessions not subject to the INA (such as American Samoa and 

the Commonwealth of the Northern Mariana Islands) have the 

same authorities as the U.S. enjoys under the INA to exercise immigration authority under the amended Compact. 

Sec. 141(h)—Notes that admission to the U.S. under the Compact 

does not count as residence necessary for U.S. naturalization, or 

88

give FSM admittees to the U.S. the right to petition for benefits for 

alien relatives under the INA. 

Sec. 142(a)—Recognizes the right of U.S. citizens to enter and 

work in the FSM (subject to the FSM’s reasonable authority to deport and deny entry), as well as the right of U.S. citizen spouses 

of FSM citizens to reside in the FSM, even after the death of the 

FSM citizen spouse. 

Sec. 142(b)—Requires that the FSM accord U.S. citizens and nationals immigration status no less favorable than that accorded to 

citizens of other countries. 

Sec. 142(c)—Provides that the FSM will adopt immigration procedures towards U.S. citizens and nationals seeking employment or 

investment in the FSM that are no less favorable than those adopted by the U.S. toward FSM citizens. 

Sec. 143—States that FSM citizens and U.S. citizens or nationals 

who lose their citizenship or nationality shall be ineligible to receive immigration privileges under the Compact. 

Article V—Representation 

Sec. 151—Provides that relations between the U.S. and the FSM 

shall be conducted in accordance with the Vienna Convention on 

Diplomatic Relations, and that the governments may establish offices and representatives as mutually agreed. 

Sec. 152—Provides that U.S. citizens and nationals who act as 

agents of FSM without authority of the U.S. are subject to the Foreign Agents Registration Act, except for U.S. citizen/national employees of the FSM whom the FSM certifies are not principally engaged in activities specified in that act. 

Article VI—Environmental Protection 

Sec. 161(a)—Declares the policy of the parties to prevent damage 

to the environment, and commits the U.S. to conducting its activities in accord with certain environmental standards similar to 

those in effect in the U.S. 

Sec. 161(b)—Commits the FSM to continuing to develop, implement, and enforce environmental standards similar to those required of the U.S. in the previous subsection. 

Sec. 161(c)—States that the parties may modify the environmental obligations of the previous two subsections by mutual 

agreement. 

Sec. 161(d)—In the event that U.S. law no longer requires Environmental Impact Statements, the obligations of Sec. 161(a) will 

continue to require them until the parties mutually agree otherwise. 

Sec. 161(e)—The President of the U.S. may exempt any USG activities from the environmental standards of Sec. 161(a)(3)–(4) if it 

is in the ‘‘paramount interest’’ of the USG to do so, after considering the views of the FSM and explaining the reasons for the exemption, to the extent practicable. 

Sec. 161(f)—States that the laws of the U.S. referred to in Sec. 

161(a)(3) apply to U.S. activities under the Compact only to the extent provided in Sec. 161. 

Sec 162—States that the FSM may bring an action for judicial 

review of USG environmental activities pursuant to Sec. 161(a) 

89

only in the U.S. District Court for Hawaii or the U.S. District 

Court for the District of Columbia, and subject to certain conditions. 

Sec. 163—States that the U.S. and the FSM shall have access to 

each other’s facilities to the extent necessary to gather information 

to carry out article VI, so long as it does not unreasonably interfere 

with the other’s exercise of its authorities and responsibilities. 

Article VII—General Legal Provisions 

Sec. 171—Except as provided in the amended Compact or related 

agreements, the application of the laws of the U.S. to the Trust 

Territory of the Pacific Islands ceased on November 3, 1986. 

Sec. 172—Declares that FSM citizens who are not U.S. residents 

shall have the same rights and remedies under U.S. law enjoyed 

by any non-resident alien. Subsection (b) affirms that the government and citizens of the FSM are ‘‘persons’’ for purposes of making 

FOIA requests and seeking judicial review of FOIA determinations, 

but states that only the FSM government (and not its citizens) 

have standing to seek judicial review relating to U.S. environmental activities governed by Sec. 161 and 162. 

Sec. 173—The U.S. and the FSM agree to adopt and enforce 

measures necessary to protect U.S. assets maintained in the FSM 

pursuant to the Compact and related agreements. 

Sec. 174—States that, except as otherwise provided in the Compact and related agreements: (a) the FSM and U.S. Governments, 

agencies, and officials shall be immune from the jurisdiction of the 

other’s courts; (b) the U.S. shall pay unpaid judgments and claim 

settlements of the Trust Territory of the Pacific Islands; (c) claims 

against the Trust Territory or U.S. Governments arising before the 

original Compact may be pursued against the U.S. Government according to certain conditions and procedures; and (d) the FSM and 

U.S. Governments shall not be immune from the jurisdiction of the 

other’s courts in civil cases that fall within exceptions to foreign 

state immunity in the Foreign Sovereign Immunities Act. 

Sec. 175(a)—Declares that a separate, simultaneously effective 

agreement between the parties shall govern mutual law enforcement assistance and cooperation, including pursuit and extradition 

of fugitives and prisoner transfers. 

Sec. 175(b)—Declares that a separate, simultaneously effective 

agreement between the parties shall govern labor recruitment practices for employment in the U.S. and enforcement for violations. 

This new section has been added to protect FSM citizens from abusive labor recruitment practices that have been recently alleged. 

Sec. 176—The FSM confirms that final judgments in civil cases 

by courts of the Trust Territory of the Pacific Islands shall continue 

in full force and effect. 

Sec. 177—Quotes the language of Sec. 177 of the original Compact which constituted a full and final settlement of all claims related to the U.S. nuclear testing program in the region, and notes 

that the amended Compacts make no changes to, and have no effect upon, that settlement. 

Sec. 178—Authorizes U.S. Federal agencies that provide services 

in the FSM to settle and pay tort claims arising in the FSM. 

Claims that cannot be settled administratively shall be disposed of 

90

exclusively according to the arbitration procedure outlined in article II of title IV of the Compact. Except as explicitly provided in 

U.S. law, neither the U.S. nor any Federal agency may be named 

as a party in any action arising out of U.S. grant assistance activities. 

Sec. 179—States that the courts of the FSM shall not exercise 

criminal jurisdiction over the U.S. Government, agencies, or employees acting on behalf of the U.S. in providing assistance to the 

FSM. 

TITLE TWO—ECONOMIC RELATIONS

Article I—Grant Assistance 

Sec. 211(a) Sector Grants—States that the U.S. shall provide 20 

years of annual sectoral grant assistance to the FSM in the priority 

sectors of education and health care, as well as in private sector 

development, the environment, public sector capacity building, public infrastructure, and other sectors as mutually agreed. The sector 

grants will be made available in accordance with mutually agreed 

sector development plans, and will be subject to monitoring according to the Fiscal Procedures Agreement between the parties. 

Sec. 211(b) Humanitarian Assistance—Makes available a ‘‘Humanitarian Assistance-FSM’’ (HAFSM) program at the request of 

the FSM, designed to extend targeted health, education, and infrastructure assistance. HAFSM costs will be deducted from the annual grant provided under Sec. 211(a), and the terms of the program will be governed by the separate Military Use and Operating 

Rights agreement. 

Sec. 211(c) Development Plan—Requires the FSM to prepare, 

maintain, and update a strategic development plan that specifically 

addresses the sectors identified in Sec. 211(a) and requires the concurrence of the U.S. (insofar as U.S. grant funds are involved). 

Sec. 211(d) Disaster Assistance Emergency Fund—Provides that 

$200,000 per year shall be provided, with a matching contribution 

from the FSM, to a Disaster Assistance Emergency Fund (DAEF), 

which may be used only for assistance and rehabilitation needs resulting from officially declared disasters or emergencies, and which 

shall be governed by the Fiscal Procedures Agreement. 

Sec. 212 Accountability—States that, as reflected in the Fiscal 

Procedures Agreement, sector grants and U.S. programs and services shall be subject to regulations and policies normally applicable 

to U.S. assistance to State and local governments. The U.S. may 

condition such assistance on performance indicators, and may seek 

remedies for noncompliance, including withholding assistance. Sec. 

212(b) states that the U.S., as part of its grant assistance, grant 

the FSM either one half of the cost of the annual audit, or 

$500,000, whichever is less. 

Sec. 213 Joint Economic Management Committee—The U.S. and 

the FSM shall establish a Joint Economic Management Committee 

(comprised of a U.S. chairman, 2 U.S. members, and 2 FSM members) governed by the Fiscal Procedures Agreement. The Committee will review the audits, reports, and progress toward plan objectives, and recommend ways to increase effectiveness. 

91

Sec. 214 Annual Report—The FSM shall report annually to the 

U.S. on its use of U.S. grant assistance and progress toward economic goals. 

Sec. 215 Trust Fund—States that the U.S. shall provide 20 years 

of annual contributions to a trust fund (governed by the separate 

Trust Fund Agreement) the proceeds of which may be used at the 

end of those 20 years for the purposes described in Sec. 211, or as 

mutually agreed. The U.S. contribution is conditioned on the FSM 

having already contributed $30 million to the fund by September 

30, 2004. 

Sec. 216 Sector Grant Funding and Trust Fund Contributions— Sets forth the amounts of U.S. sector grants and trust fund contributions for each of the 20 years of assistance. The combined 

amount for each year is $92.7 million. 

Sec. 217 Inflation Adjustment—States that the grant and trust 

fund contributions for each fiscal year shall be adjusted by twothirds the amount of the U.S. GDP Implicit Price Deflator or 5 percent, whichever is less. 

Sec. 218 Carry-Over of Unused Funds—States that unobligated 

balances from any year shall remain available to the FSM in future 

years. 

Article II—Services and Program Assistance 

Sec. 221(a) Services—States that the U.S. shall make available 

to the FSM (to the extent provided in the Federal Programs and 

Services Agreement) the services and related programs of: (1) U.S. 

Weather Service; (2) U.S. Postal Service; (3) Federal Aviation Administration; (4) U.S. Department of Transportation; (5) Federal 

Deposit Insurance Corporation; and (6) Federal Emergency Management Agency, and USAID/Office of Foreign Disaster Assistance. 

Sec. 221(b) Programs—States that, with the exception of those 

services covered by Sec. 221(a), the U.S. shall (unless Congress provides otherwise) make available to the FSM the services and programs that were available to the FSM on the effective date of the 

amended Compact, to the extent that such services are available to 

U.S. State & local governments. 

Sec. 221(c)—States that the U.S. has the authority to monitor 

and administer all service and program assistance to the FSM. 

Sec. 221(d)—States that, except as otherwise provided, Federal 

programs and services extended to the FSM shall be subject to the 

same standards and rules applicable to such programs in the U.S. 

Sec. 221(e)—States that the U.S. shall make available to the 

FSM, to the extent provided in U.S. law, alternate energy development projects and conservation measures. 

Sec. 222—States that the U.S. and the FSM may agree to extend 

additional U.S. grant assistance to the FSM, which shall be governed by the Federal Programs and Services Agreement. 

Sec. 223—The FSM shall make available at no charge to the U.S. 

whatever land is necessary for such service and program assistance, and whatever facilities are currently provided at no cost to 

the U.S., or may be mutually agreed in the future. 

Sec. 224—States that the FSM may request technical assistance 

from U.S. Federal agencies that, if provided, would give priority 

consideration to the FSM over other non-U.S. recipients. 

92

Article III—Administrative Provisions 

Sec. 231—Notes that the extent of U.S. program assistance, the 

status of U.S. agencies and employees, and other program and 

service-related arrangements are set forth in a separate Federal 

Programs and Services Agreement. 

Sec. 232—States that the U.S. shall determine and implement 

procedures for audits of all grant and program assistance, and authorizes the U.S. Comptroller General to conduct audits in the 

FSM. 

Sec. 233—The U.S. pledges that it will provide the grant assistance (specified in Sec. 211) for the 20 year term specified, subject 

to the terms and conditions of title II and related subsidiary agreements. 

Sec. 234—The FSM pledges that it will cooperate in U.S. investigations of misuse of Compact funds and that it will not unreasonably withhold U.S.-requested subpoena assistance in the FSM. The 

FSM acknowledges that its receipt of Compact funding is conditioned on its fulfillment of these obligations. 

Article IV—Trade 

Sec. 241—States that the FSM is not within the customs territory of the U.S. 

Sec. 242(a)—Unless otherwise excluded, articles imported from 

the FSM shall be exempt from duty. 

Sec. 242(b)—States that imports of ‘‘tuna in airtight containers’’ 

from the FSM shall be exempt from duty, in an amount not to exceed (when aggregated with the amount imported from the RMI) 

10 percent of the previous year’s U.S. consumption of ‘‘tuna in airtight containers.’’

Sec. 242(c)—States that duty-free treatment shall not be extended to certain classes of watches, clocks, buttons, textiles, apparel, footwear, and luggage. 

Sec. 242(d)—Provides that the value of U.S. inputs into products 

imported from the FSM (up to 15 percent of the article’s total appraised value) may be applied for duty assessment purposes toward 

determining the percentage referred to in Sec. 503(a)(2) of title V 

of the Trade Act of 1974. 

Sec. 243—States that articles imported from the FSM and not 

exempt from duty under Sec. 242 are subject to the duty rates in 

column 1-general of the Harmonized Tariff Schedule of the U.S. 

Sec. 244—Ensures that all U.S. products imported into the FSM 

receive customs treatment no less favorable than that accorded like 

products of any foreign country, except for advantages accorded by 

the FSM to other governments listed in article 26 of the Pacific Island Countries Trade Agreement (PICTA). The FSM commits to 

consult with the U.S. before concluding a free trade agreement 

with any government not listed in PICTA. 

Article V—Finance and Taxation 

Sec. 251—Notes that U.S. currency is the legal tender of the 

FSM, and states that the FSM will agree on a transitional period 

with the U.S. before switching to any other currency. 

Sec. 252—The FSM may tax U.S. persons on income earned and 

property located within the FSM. 

93

Sec. 253—FSM citizens domiciled in the FSM are exempt from 

U.S. estate, gift, and generation-skipping transfer taxes, provided 

that they are neither citizens nor residents of the U.S. 

Sec. 254—States that the FSM shall have authority to tax FSM 

residents for income earned outside the FSM to the same extent 

that it taxes income earned in the FSM. If the FSM imposes such 

taxes, any FSM resident who is subject to U.S. taxes on the same 

income shall be relieved of such tax liability to the U.S. (in the 

form of a foreign tax credit or exclusion under Sec. 911 of the Internal Revenue Code). 

Sec. 255—Grants U.S. tax benefits for conventions held in the 

FSM. 

TITLE THREE—SECURITY AND DEFENSE RELATIONS

Article I—Authority and Responsibility 

Sec. 311—The U.S. has full authority and responsibility for defense matters in or relating to the FSM, including: the obligation 

to defend the FSM; the option to foreclose military access to the 

FSM to any third country (a.k.a. ‘‘strategic denial’’); and the option 

to establish military facilities in the FSM. 

Sec. 312—The U.S. may conduct necessary military operations in 

FSM lands, waters, and airspace. 

Sec. 313—The FSM shall refrain from actions that the U.S., after 

consultation, deems incompatible with U.S. defense authorities and 

responsibilities (a.k.a. ‘‘defense veto’’). 

Sec. 314—Unless otherwise agreed, the U.S. shall not test, dispose of, or store (outside of a time of emergency or war) any nuclear, chemical, or biological weapon in the FSM. 

Sec. 315—The U.S. may invite other countries’ armed forces 

(under the control of U.S. forces) to use military facilities in the 

FSM. Such use is subject to consultation with and (in the case of 

major units) approval of the FSM. 

Sec. 316—The U.S. may not transfer or assign its authority or 

responsibility under this title. 

Article II—Defense Facilities and Operating Rights 

Sec. 321—Specific arrangements for establishment of U.S. military facilities in the FSM are set forth in a separate agreement. 

The U.S. may request to lease additional areas within FSM. The 

FSM will consider such requests sympathetically, and the U.S. will 

respect the scarcity of land in the FSM. 

Sec. 322—The U.S. will provide and maintain certain fixed and 

floating navigational aids in the FSM. 

Sec. 323—U.S. military operating rights and the status of U.S. 

forces in the FSM are set forth in separate agreements. 

Article III—Defense Treaties and International Security Agreements 

Sec. 331—States that the U.S. has assumed and enjoys all rights 

and obligations of (a) pre-Compact treaties and international security agreements applied by the U.S. as Administering Authority of 

the Trust Territory of the Pacific Islands, and (b) any treaty or 

international security agreement to which the U.S. is a party and 

deems applicable in the FSM. 

94

Article IV—Service in Armed Forces of the United States 

Sec. 341—States that persons entitled to the Compact immigration benefits (in Sec. 141) are eligible to volunteer for service in the 

U.S. Armed Forces. 

Sec. 342—States that the U.S. will have at any given time at 

least one qualified FSM student enrolled in its Coast Guard Academy and Merchant Marine Academy. 

Article V—General Provisions 

Sec. 351—The U.S. and the FSM will continue to maintain a 

Joint Committee of senior officials to consider disputes arising 

under the Security title of the Compact, which will meet annually 

or upon request of either country. 

Sec. 352—In exercising its authority under this title, the U.S. 

shall accord due respect to the authority and responsibility of the 

FSM to assure the well-being of its people. 

Sec. 353—The U.S. will not name the FSM as a party to a declaration of war without the FSM’s consent. Without such consent, 

the Compact will not prejudice any FSM petitions for redress from 

the US or claims against third countries arising out of armed conflict. 

Sec. 354(a)—The security provisions of title three shall remain 

binding for the duration of the Compact, and thereafter as mutually agreed. If either the U.S. or the FSM unilaterally terminates 

this title, it will be considered a termination of the entire Compact 

(as provided in articles IV and V of title four). 

Sec. 354(b)—Even if this security title should terminate, any attack on the FSM during the period in which the separate Military 

Use and Operating Rights agreement is in effect will result in the 

U.S. taking action to meet the danger to the U.S. and the FSM. 

Sec. 354(c)—Even if this security title should terminate, the FSM 

shall refrain from acts which the U.S. determines to be incompatible with its authority and responsibility for security and defense 

matters relating to the FSM and RMI (i.e., the ‘‘defense veto’’ continues). 

TITLE FOUR—GENERAL PROVISIONS

Article I—Approval and Effective Date 

Sec. 411—The amended Compact shall come into effect upon mutual agreement between the U.S. and the FSM after approval by 

their respective governments. 

Article II—Conference and Dispute Resolution 

Sec. 421—Both governments shall confer promptly upon the request of the other on Compact-related matters. 

Sec. 422—If, after conferring, one government determines that 

there is a dispute and notifies the other in writing, both governments shall make a good faith effort to resolve it between themselves. 

Sec. 423—If the governments cannot resolve a dispute within 90 

days of the written notice, either party may refer it to arbitration 

according to Sec. 424. 

95

Sec. 424—Such disputes will be referred to a binding Arbitration 

Board comprised of one Chairman (jointly selected by the parties) 

and two other members (one each selected by the U.S. and FSM). 

Unless otherwise provided, the Board shall have jurisdiction over 

disputes arising exclusively under the Compact and related agreements. The Board shall conduct its proceedings as it deems appropriate and reach its decision by majority vote, preferably within 30 

days after the conclusion of arguments. Except as otherwise decided by the board, the U.S. and the FSM shall split the costs of 

the arbitration. 

Article III—Amendment 

Sec. 431—The amended Compact may be further amended by 

mutual agreement of the parties, according to their respective constitutional processes. 

Article IV—Termination 

Sec. 441—The amended Compact may be terminated by mutual 

agreement of the parties, in which case Sec. 451 will apply. 

Sec. 442—The amended Compact may be terminated by the U.S., 

in which case Sec. 452 will apply. Such termination shall be effective not earlier than 6 months following delivery of the notice of 

termination. 

Sec. 443—The amended Compact may be terminated by the FSM 

if the FSM people vote for termination in a plebiscite, or by some 

other mutually agreed process, in which case Sec. 453 will apply. 

Such termination shall be effective not earlier than 3 months following notice to the U.S. of the plebiscite vote for termination. 

Article V—Survivability 

Sec. 451 (After mutual termination, per Sec. 441) 

Sec. 451(a)—Should the parties mutually terminate the Compact, U.S. economic and other assistance to the FSM shall continue only by mutual agreement. 

Sec. 451(b)—In the event of mutual termination prior to the 

20th anniversary of the amended Compact, the U.S. will continue to make its contributions to the FSM Trust Fund so long 

as the U.S. continues to enjoy the right of strategic denial and 

the defense veto (under Sec. 354(c) and the separate mutual security agreement). 

Sec. 451(c)—In the event of mutual termination after the 

20th anniversary of the amended Compact, the FSM will be 

entitled to receive proceeds from its Trust Fund as described 

in Sec. 215 and the Trust Fund Agreement. 

Sec. 452 (After U.S. termination, per Sec. 442) 

Sec. 452(a)—Describes the Compact provisions that survive 

if the U.S. terminates the amended Compact before its 20th 

anniversary (including certain provisions regarding: environmental protection, grant audits and fund misuse investigations, security and defense relations, and dispute resolution). 

Those provisions remain in effect until the 20th anniversary, 

and thereafter as mutually agreed. 

Sec. 452(b)—If the U.S. terminates the amended Compact 

before its 20th anniversary, economic and other assistance will 

96

continue only by mutual agreement, except that the U.S. will 

continue to make its contributions to the FSM Trust Fund so 

long as the U.S. continues to enjoy the right of strategic denial 

and the defense veto (under Sec. 354(c) and the separate mutual security agreement). 

Sec. 452(c)—If the U.S. terminates the amended Compact 

after its 20th anniversary, the FSM will be entitled to receive 

proceeds from its Trust Fund as described in Sec. 215 and the 

Trust Fund Agreement. 

Sec. 453 (After FSM termination, per Sec. 443) 

Sec. 453(a)—Describes the Compact provisions that survive 

if the FSM terminates the amended Compact before its 20th 

anniversary (including certain provisions regarding: environmental protection, grant audits and fund misuse investigations, security and defense relations, and dispute resolution). 

Those provisions remain in effect until the 20th anniversary, 

and thereafter as mutually agreed. 

Sec. 453(b)—In the event of FSM termination, there shall be 

prompt consultations between the countries regarding their future relationship to determine the level of future U.S. assistance, if any, other than what is provided in subsections (c) and 

(d) of this section. 

Sec. 453(c)—If the FSM terminates the amended Compact 

before its 20th anniversary, the U.S. will continue to make its 

contributions to the FSM Trust Fund so long as the U.S. continues to enjoy the right of strategic denial and the defense 

veto (under Sec. 354(c) and the separate mutual security agreement). 

Sec. 453(d)—If the FSM terminates the amended Compact 

after its 20th anniversary, the FSM will be entitled to receive 

proceeds from its Trust Fund as described in Sec. 215 and the 

Trust Fund Agreement. 

Sec. 454—Notwithstanding any other provision of the amended 

Compact: (1) the U.S. reaffirms its interest in promoting the economic advancement of the FSM; and (2) the separate Military Use 

and Operating Rights Agreement and Status of Forces Agreement 

shall remain in effect in accordance with their terms. 

Article VI—Definition of Terms 

Sec. 461—Sets forth definitions for a number of terms used in 

the amended Compact. 

Sec. 462(a)—Lists the separate agreements that will remain in 

effect under the amended Compact, including: (1) the trilateral 

agreement on transfer of Trust Territory property; (2) the Friendship, Cooperation, and Mutual Security Agreement; and (3) the 

Maritime Sovereignty and Jurisdiction Agreement. 

Sec. 462(b)—Lists the separate agreements that will go into effect under the amended Compact, including: (1) the Federal Programs and Services Agreement; (2) the Extradition, Mutual Assistance in Law Enforcement, and Penal Sanctions Agreement; (3) the 

Labor Recruitment Agreement (implementing Sec. 175(b)); (4) the 

Fiscal Procedures Agreement; (5) the Trust Fund Agreement; (6) 

the Military Use and Operating Rights Agreement; and (7) the Status of Forces Agreement. 

97

Sec. 463—Clarifies that certain references in the amended Compact to various U.S. laws constitutes the incorporation of the applicable language of those laws into the amended Compact. 

Article VII—Concluding Provisions 

Sec. 471—Both the U.S. and the FSM shall take all necessary 

steps to ensure the conformity of their respective laws and regulations with the provisions of the amended Compact. 

Sec. 472—The amended Compact may be accepted by the U.S. 

and the FSM by signature or otherwise. 

SECTION-BY-SECTION SUMMARY OF THE AMENDED COMPACT OF

FREE ASSOCIATION WITH THE REPUBLIC OF THE MARSHALL ISLANDS [SEC. 201(B) OF H.J. RES. 63] 

The Preamble has been updated to reflect that the Republic of 

the Marshall Islands (RMI) is a sovereign country (not a Trust Territory), that the amended Compacts are now separate (one each 

with the RMI and the FSM), and the term ‘‘self-sufficiency’’ has 

been replaced by ‘‘budgetary self-reliance’’ (to reflect the objective 

that the RMI end its reliance on U.S. financial assistance and obtain revenues from other legitimate sources). 

TITLE ONE—GOVERNMENTAL RELATIONS

Article I—Self Government 

Sec. 111—States that the people of the RMI are self-governing. 

Article II—Foreign Affairs 

Sec. 121—Affirms the capacity of the Government of the RMI to 

conduct foreign affairs. 

Sec. 122—States that the U.S. will support RMI membership in 

international organizations. 

Sec. 123—States that the U.S. and RMI will consult with each 

other regarding foreign affairs. 

Sec. 124—The U.S. may assist the RMI with foreign affairs when 

requested and mutually agreed. 

Sec. 125—The U.S. cannot be obligated by the RMI’s conduct of 

foreign affairs unless expressly agreed. 

Sec. 126—Makes available U.S. consular services to RMI citizens 

traveling outside the RMI. 

Sec. 127—Except as agreed in the amended Compact and related 

agreements, the rights and obligations of the U.S. as Administering 

Authority of the Trust Territory of the Pacific Islands ended on October 20, 1986. 

Article III—Communications 

Sec. 131—States that the RMI has authority to regulate its communications, and notes that the RMI assumed telecommunications 

functions previously performed by the U.S., except as otherwise 

provided. 

Aricle IV—Immigration 

Sec. 141(a)—Provides that otherwise admissible RMI citizens will 

continue to be eligible for visa-free admission to the U.S. (including 

98

territories and possessions) to lawfully engage in occupations and 

establish residence as nonimmigrants, but now requires that they 

possess valid passports. Subsections (3) and (4) restrict the class of 

naturalized RMI citizens eligible for this special status (to address 

concerns about potential abuse of the special status by non-RMI 

natives). Subsection (5) extends this status to bona fide immediate 

relatives of RMI citizens serving on active duty with the U.S. 

Armed Forces. 

Sec. 141(b)—Provides that RMI children traveling to the U.S. for 

the purpose of being adopted are not eligible for visa-free admission 

under the Compact. This new language is intended to prevent attempted use of Compact privileges to circumvent U.S. immigration 

requirements that help ensure the legitimacy of international adoptions, protect the children involved, and provide the adoptees with 

lawful permanent immigration status. 

Sec. 141(c)—This new language, which declares that no person 

who has purchased RMI citizenship or an RMI passport shall be eligible for admission to the U.S. under the amended Compact, is intended to remove incentives for passport sales or other abuse. 

Sec. 141(d)—Confirms the existing privilege to work in the U.S. 

and expands the types of documents that RMI citizens can use to 

demonstrate identity and employment authorization under U.S. immigration law. 

Sec. 141(e)—Defines certain terms used in this immigration title. 

Sec. 141(f)—Affirms that (except as specified in Sec. 141(a)) the 

U.S. Immigration and Nationality Act (INA) applies fully to any 

person admitted to the U.S. (or seeking admission to the U.S.) 

under the Compact, and that the U.S. has full authority under the 

INA to regulate the terms and conditions of persons seeking admission under the Compact. 

Sec. 141(g)—Provides that the governments of U.S. territories or 

possessions not subject to the INA (such as American Samoa and 

the Commonwealth of the Northern Mariana Islands) have the 

same authorities as the U.S. enjoys under the INA to exercise immigration authority under the amended Compact. 

Sec. 141(h)—Notes that admission to the U.S. under the Compact 

does not count as residence necessary for U.S. naturalization, or 

give RMI admittees to the U.S. the right to petition for benefits for 

alien relatives under the INA. 

Sec. 142(a)—Recognizes the right of U.S. citizens to enter and 

work in the RMI (subject to the RMI’s reasonable authority to deport and deny entry), as well as the right of U.S. citizen spouses 

of RMI citizens to reside in the RMI, even after the death of the 

RMI citizen spouse. 

Sec. 142(b)—Requires that the RMI accord U.S. citizens and nationals immigration status no less favorable than that accorded to 

citizens of other countries. 

Sec. 142(c)—Provides that the RMI will adopt immigration procedures towards U.S. citizens and nationals seeking employment or 

investment in the RMI that are no less favorable than those adopted by the U.S. toward RMI citizens. 

Sec. 143—States that RMI citizens and U.S. citizens or nationals 

who lose their citizenship or nationality shall be ineligible to receive immigration privileges under the Compact. 

99

Article V—Representation 

Sec. 151—Provides that relations between the U.S. and the RMI 

shall be conducted in accordance with the Vienna Convention on 

Diplomatic Relations, and that the governments may establish offices and representatives as mutually agreed. 

Sec. 152—Provides that U.S. citizens and nationals who act as 

agents of RMI without authority of the U.S. are subject to the Foreign Agents Registration Act, except for U.S. citizen/national employees of the RMI whom the RMI certifies are not principally engaged in activities specified in that act. 

Article VI—Environmental Protection 

Sec. 161(a)—Declares the policy of the parties to prevent damage 

to the environment, and commits the U.S. to conducting its activities in accord with certain environmental standards similar to 

those in effect in the U.S. 

Sec. 161(b)—Commits the RMI to continuing to develop, implement, and enforce environmental standards similar to those required of the U.S. in the previous subsection. 

Sec. 161(c)—States that the parties may modify the environmental obligations of the previous two subsections by mutual 

agreement. 

Sec. 161(d)—In the event that U.S. law no longer requires Environmental Impact Statements, the obligations of Sec. 161(a) will 

continue to require them until the parties mutually agree otherwise. 

Sec. 161(e)—The President of the U.S. may exempt any USG activities from the environmental standards of Sec. 161(a)(3)–(4) if it 

is in the ‘‘paramount interest’’ of the USG to do so, after considering the views of the RMI and explaining the reasons for the exemption, to the extent practicable. 

Sec. 161(f)—States that the laws of the U.S. referred to in Sec. 

161(a)(3) apply to U.S. activities under the Compact only to the extent provided in Sec. 161. 

Sec 162—States that the RMI may bring an action for judicial review of USG environmental activities pursuant to Sec. 161(a) only 

in the U.S. District Court for Hawaii or the U.S. District Court for 

the District of Columbia, and subject to certain conditions. 

Sec. 163—States that the U.S. and the RMI shall have access to 

each other’s facilities to the extent necessary to gather information 

to carry out article VI, so long as it does not unreasonably interfere 

with the other’s exercise of its authorities and responsibilities. 

Article VII—General Legal Provisions 

Sec. 171—Except as provided in the amended Compact or related 

agreements, the application of the laws of the U.S. to the Trust 

Territory of the Pacific Islands ceased on November 3, 1986. 

Sec. 172—Declares that RMI citizens who are not U.S. residents 

shall have the same rights and remedies under U.S. law enjoyed 

by any non-resident alien. Subsection (b) affirms that the government and citizens of the RMI are ‘‘persons’’ for purposes of making 

FOIA requests and seeking judicial review of FOIA determinations, 

but states that only the RMI government (and not its citizens) have 

100

standing to seek judicial review relating to U.S. environmental activities governed by Sec. 161 and 162. 

Sec. 173—The U.S. and the RMI agree to adopt and enforce 

measures necessary to protect U.S. assets maintained in the RMI 

pursuant to the Compact and related agreements. 

Sec. 174—States that, except as otherwise provided in the Compact and related agreements: (a) the RMI and U.S. Governments, 

agencies, and officials shall be immune from the jurisdiction of the 

other’s courts; (b) the U.S. shall pay unpaid judgments and claim 

settlements of the Trust Territory of the Pacific Islands; (c) claims 

against the Trust Territory or U.S. Governments arising before the 

original Compact may be pursued against the U.S. Government according to certain conditions and procedures; and (d) the RMI and 

U.S. Governments shall not be immune from the jurisdiction of the 

other’s courts in civil cases that fall within exceptions to foreign 

state immunity in the Foreign Sovereign Immunities Act. 

Sec. 175(a)—Declares that a separate, simultaneously effective 

agreement between the parties shall govern mutual law enforcement assistance and cooperation, including pursuit and extradition 

of fugitives and prisoner transfers. 

Sec. 175(b)—Declares that a separate, simultaneously effective 

agreement between the parties shall govern labor recruitment practices for employment in the U.S. and enforcement for violations. 

This new section has been added to protect RMI citizens from abusive labor recruitment practices that have been recently alleged. 

Sec. 176—The RMI confirms that final judgments in civil cases 

by courts of the Trust Territory of the Pacific Islands shall continue 

in full force and effect. 

Sec. 177—Quotes the language of Sec. 177 of the original Compact which constituted a full and final settlement of all claims related to the U.S. nuclear testing program in the region, and notes 

that the amended Compacts make no changes to, and have no effect upon, that settlement. 

Sec. 178—Authorizes U.S. Federal agencies that provide services 

in the RMI to settle and pay tort claims arising in the RMI. Claims 

that cannot be settled administratively shall be disposed of exclusively according to the arbitration procedure outlined in article II 

of title IV of the Compact. Except as explicitly provided in U.S. 

law, neither the U.S. nor any Federal agency may be named as a 

party in any action arising out of U.S. grant assistance activities. 

Sec. 179—States that the courts of the RMI shall not exercise 

criminal jurisdiction over the U.S. Government, agencies, or employees acting on behalf of the U.S. in providing assistance to the 

RMI. 

TITLE TWO—ECONOMIC RELATIONS

Article I—Grant Assistance 

Sec. 211—Annual Grant Assistance 

Sec. 211(a)—States that the U.S. shall provide 20 years of annual grant assistance to the RMI in the areas of education, health 

care, the environment, public sector capacity building, and private 

sector development, and other areas as mutually agreed. The sector 

grants will be made available in accordance with mutually agreed 

101

sector development plans, and will be subject to monitoring according to the Fiscal Procedures Agreement between the parties. 

Sec. 211(b) Kwajalein Atoll—

Sec. 211(b)(1)—Of the total grant assistance made available 

to the RMI, a specified amount shall be used to address the 

special needs (including infrastructure and services delivery) of 

the population at Ebeye and other Marshallese communities 

within Kwajalein Atoll. That annual amount shall be $3.1 million (with an inflation adjustment) through FY2013, and shall 

be increased by an additional $2 million (with an inflation adjustment) for FY2014 through FY2023, and thereafter in accordance with the Military Use and Operating Rights Agreement. 

Sec. 211(b)(2)—In addition to the 211(a) money earmarked in the subsection above, the U.S. will provide an additional $1.9 

million per year (with an inflation adjustment and subject to 

the Fiscal Procedures Agreement) for those special needs, from 

FY2004 through FY2023 (and thereafter in accordance with 

the Military Use and Operating Rights Agreement). 

Sec. 211(b)(3)—Of the total 211(a) annual grant assistance, $200,000 (w/ inflation adjustment) shall be allocated for increasing the RMI’s participation in and ability to analyze the 

annual U.S. Army Kwajalein Atoll Environmental Standards 

Survey. 

Sec. 211(c) Humanitarian Assistance—Makes available a ‘‘Humanitarian Assistance—RMI’’ (HARMI) program at the request of 

the RMI, designed to extend targeted health, education, and infrastructure assistance. HARMI costs will be deducted from the annual grant provided under Sec. 211(a), and the terms of the program will be governed by the separate Military Use and Operating 

Rights agreement. 

Sec. 211(d) Public Infrastructure—Unless otherwise agreed, between 30 and 50 percent of U.S. annual grant assistance shall be 

made available for infrastructure improvement and maintenance. 

Five percent of that amount shall be set aside, with an equal RMI 

contribution, for an infrastructure maintenance fund. 

Sec. 211(e) Disaster Assistance Emergency Fund—Provides that 

$200,000 per year of the grant assistance in Sec. 211(a) shall be 

provided, with a matching contribution from the RMI, for a Disaster Assistance Emergency Fund (DAEF), which may be used only 

for assistance and rehabilitation needs resulting from officially declared disasters or emergencies, and which shall be governed by 

the Fiscal Procedures Agreement. 

Sec. 211(f) Budget and Investment Framework—Requires the 

RMI to prepare, maintain, and update a strategic, medium term 

budget and investment framework that specifically addresses the 

sectors and areas identified in Sec. 211(a) and requires the concurrence of the U.S. (insofar as U.S. grant funds are involved). 

Sec. 212 Kwajalein Impact and Use—In connection with its military use of Kwajalein Atoll, the U.S. shall provide to the RMI an 

annual payment of $15 million (with an inflation adjustment) from 

FY04 through FY2013. From FY2014 through FY2023 the annual 

payment will be either the 2013 amount or $18 million, whichever 

is greater (also with an annual inflation adjustment). 

102

Sec. 213 Accountability—States that, as reflected in the Fiscal 

Procedures Agreement, sector grants and U.S. programs and services shall be subject to regulations and policies normally applicable 

to U.S. assistance to State and local governments. The U.S. may 

condition such assistance on performance indicators, and may seek 

remedies for noncompliance, including withholding assistance. Sec. 

212(b) states that the U.S., as part of its grant assistance, will 

grant the RMI either one half of the cost of the annual audit, or 

$500,000, whichever is less. 

Sec. 214 Joint Economic Management and Financial Accountability Committee—The U.S. and the RMI shall establish a Joint 

Economic Management and Financial Accountability Committee 

(comprised of a U.S. chairman, 2 U.S. members, and 2 RMI members) governed by the Fiscal Procedures Agreement. The Committee will review the audits, reports, and progress toward plan objectives, and recommend ways to increase effectiveness. 

Sec. 215 Annual Report—The RMI shall report annually to the 

U.S. on its use of U.S. grant assistance and progress toward economic goals. 

Sec. 216 Trust Fund—States that the U.S. shall provide 20 years 

of annual contributions to a trust fund (governed by the separate 

Trust Fund Agreement) the proceeds of which may be used at the 

end of those 20 years for the purposes described in Sec. 211, or as 

mutually agreed. The U.S. contribution is conditioned on the RMI 

contributing $25 million to the fund by September 30, 2003, an additional $2.5 million by October 1, 2004, and an additional $2.5 

million by October 1, 2005. 

Sec. 217 Annual Grant Funding and Trust Fund Contributions— Sets forth the amounts of U.S. grant assistance and trust fund contributions for each of the 20 years of assistance. The combined 

amount is $57.7 million annually from FY04 through FY2013, and 

$62.7 million annually from FY2014 through FY2023. 

Sec. 218 Inflation Adjustment—States that the grant and trust 

fund contributions for each fiscal year shall be adjusted by twothirds the amount of the U.S. GDP Implicit Price Deflator, or 5 

percent, whichever is less. 

Sec. 219 Carry-Over of Unused Funds—States that unobligated 

balances from any year shall remain available to the RMI in future 

years. 

Article II—Services and Program Assistance 

Sec. 221(a) Services—States that the U.S. shall make available 

to the RMI (to the extent provided in the Federal Programs and 

Services Agreement) the services and related programs of: (1) U.S. 

Weather Service; (2) U.S. Postal Service; (3) Federal Aviation Administration; (4) U.S. Department of Transportation; and (5) the 

Department of Homeland Security, and USAID/Office of Foreign 

Disaster Assistance. 

Sec. 221(b) Programs—States that, with the exception of those 

services covered by Sec. 221(a), the U.S. shall (unless Congress provides otherwise) make available to the RMI the services and programs that were available to the RMI on the effective date of the 

amended Compact, to the extent that such services are available to 

U.S. State & local governments. 

103

Sec. 221(c)—States that the U.S. has the authority to monitor 

and administer all service and program assistance to the RMI. 

Sec. 221(d)—States that, except as otherwise provided, Federal 

programs and services extended to the RMI shall be subject to the 

same standards and rules applicable to such programs in the U.S. 

Sec. 221(e)—States that the U.S. shall make available to the 

RMI, to the extent provided in U.S. law, alternate energy development projects and conservation measures. 

Sec. 222—States that the U.S. and the RMI may agree to extend 

additional U.S. grant assistance to the RMI, which shall be governed by the Federal Programs and Services Agreement. 

Sec. 223—The RMI shall make available at no charge to the U.S. 

whatever land is necessary for such service and program assistance, and whatever facilities are currently provided at no cost to 

the U.S., or may be mutually agreed in the future. 

Sec. 224—States that the RMI may request technical assistance 

from U.S. Federal agencies that, if provided, would give priority 

consideration to the RMI over other non-U.S. recipients. 

Article III—Administrative Provisions 

Sec. 231—Notes that the extent of U.S. program assistance, the 

status of U.S. agencies and employees, and other program and 

service-related arrangements are set forth in a separate Federal 

Programs and Services Agreement. 

Sec. 232—States that the U.S. shall determine and implement 

procedures for audits of all grant and program assistance, and authorizes the U.S. Comptroller General to conduct audits in the 

RMI. 

Sec. 233—The U.S. pledges that it will provide the grant assistance (specified in Sec. 211) for the 20 year term specified, subject 

to the terms and conditions of title II and related subsidiary agreements. 

Sec. 234—The RMI pledges that it will cooperate in U.S. investigations of misuse of Compact funds and that it will not unreasonably withhold U.S.-requested subpoena assistance in the RMI. The 

RMI acknowledges that its receipt of Compact funding is conditioned on its fulfillment of these obligations. 

Article IV—Trade 

Sec. 241—States that the RMI is not within the customs territory 

of the U.S. 

Sec. 242(a)—Unless otherwise excluded, articles imported from 

the RMI shall be exempt from duty. 

Sec. 242(b)—States that imports of ‘‘tuna in airtight containers’’ 

from the RMI shall be exempt from duty, in an amount not to exceed (when aggregated with the amount imported from the FSM) 

10 percent of the previous year’s U.S. consumption of ‘‘tuna in airtight containers.’’

Sec. 242(c)—States that duty-free treatment shall not be extended to certain classes of watches, clocks, buttons, textiles, apparel, footwear, and luggage. 

Sec. 242(d)—Provides that the value of U.S. inputs into products 

imported from the RMI (up to 15 percent of the article’s total appraised value) may be applied for duty assessment purposes toward 

104

determining the percentage referred to in Sec. 503(a)(2) of title V 

of the Trade Act of 1974. 

Sec. 243—States that articles imported from the RMI and not exempt from duty under Sec. 242 are subject to the duty rates in column 1-general of the Harmonized Tariff Schedule of the U.S. 

Sec. 244—Ensures that all U.S. products imported into the RMI 

receive customs treatment no less favorable than that accorded like 

products of any foreign country, except for advantages accorded by 

the RMI to other governments listed in article 26 of the Pacific Island Countries Trade Agreement (PICTA). The RMI commits to 

consult with the U.S. before concluding a free trade agreement 

with any government not listed in PICTA. 

Article V—Finance and Taxation 

Sec. 251—Notes that U.S. currency is the legal tender of the 

RMI, and states that the RMI will agree on a transitional period 

with the U.S. before switching to any other currency. 

Sec. 252—The RMI may tax U.S. persons on income earned and 

property located within the RMI. 

Sec. 253—RMI citizens domiciled in the RMI are exempt from 

U.S. estate, gift, and generation-skipping transfer taxes, provided 

that they are neither citizens nor residents of the U.S. 

Sec. 254—States that the RMI shall have authority to tax RMI 

residents for income earned outside the RMI to the same extent 

that it taxes income earned in the RMI. If the RMI imposes such 

taxes, any RMI resident who is subject to U.S. taxes on the same 

income shall be relieved of such tax liability to the U.S. (in the 

form of a foreign tax credit or exclusion under Sec. 911 of the Internal Revenue Code). 

Sec. 255—Grants U.S. tax benefits for conventions held in the 

RMI. 

TITLE THREE—SECURITY AND DEFENSE RELATIONS

Article I—Authority and Responsibility 

Sec. 311—The U.S. has full authority and responsibility for defense matters in or relating to the RMI, including: the obligation 

to defend the RMI; the option to foreclose military access to the 

RMI to any third country (a.k.a. ‘‘strategic denial’’); and the option 

to establish military facilities in the RMI. 

Sec. 312—The U.S. may conduct necessary military operations in 

RMI lands, waters, and airspace. 

Sec. 313—The RMI shall refrain from actions that the U.S., after 

consultation, deems incompatible with U.S. defense authorities and 

responsibilities (a.k.a. ‘‘defense veto’’). 

Sec. 314—Unless otherwise agreed, the U.S. shall not test, dispose of, or store (outside of a time of emergency or war) any nuclear, chemical, or biological weapon in the RMI. 

Sec. 315—The U.S. may invite other countries’ armed forces 

(under the control of U.S. forces) to use military facilities in the 

RMI. Such use is subject to consultation with and (in the case of 

major units) approval of the RMI. 

Sec. 316—The U.S. may not transfer or assign its authority or 

responsibility under this title. 

105

Article II—Defense Facilities and Operating Rights 

Sec. 321—Specific arrangements for establishment of U.S. military facilities in the RMI are set forth in a separate agreement. 

The U.S. may request to lease additional areas within RMI. The 

RMI will consider such requests sympathetically, and the U.S. will 

respect the scarcity of land in the RMI. 

Sec. 322—The U.S. will provide and maintain certain fixed and 

floating navigational aids in the RMI. 

Sec. 323—U.S. military operating rights and the status of U.S. 

forces in the RMI are set forth in separate agreements. 

Article III—Defense Treaties and International Security Agreements 

Sec. 331—States that the U.S. has assumed and enjoys all rights 

and obligations of (a) pre-Compact treaties and international security agreements applied by the U.S. as Administering Authority of 

the Trust Territory of the Pacific Islands, and (b) any treaty or 

international security agreement to which the U.S. is a party and 

deems applicable in the RMI. 

Article IV—Service in Armed Forces of the United States 

Sec. 341—States that persons entitled to the Compact immigration benefits (in Sec. 141) are eligible to volunteer for service in the 

U.S. Armed Forces. 

Sec. 342—States that the U.S. will have at any given time at 

least one qualified RMI student enrolled in its Coast Guard Academy and Merchant Marine Academy. 

Article V—General Provisions 

Sec. 351—The U.S. and the RMI will continue to maintain a 

Joint Committee of senior officials to consider disputes arising 

under the Security title of the Compact, which will meet annually 

or upon request of either country. 

Sec. 352—In exercising its authority under this title, the U.S. 

shall accord due respect to the authority and responsibility of the 

RMI to assure the well-being of its people. 

Sec. 353—The U.S. will not name the RMI as a party to a declaration of war without the RMI’s consent. Without such consent, 

the Compact will not prejudice any RMI petitions for redress from 

the US or claims against third countries arising out of armed conflict. 

Sec. 354(a)—The security provisions of title three shall remain 

binding for the duration of the Compact, and thereafter as mutually agreed. If either the U.S. or the RMI unilaterally terminates 

this title, it will be considered a termination of the entire Compact 

(as provided in articles IV and V of title four). 

Sec. 354(b)—Even if this security title should terminate, any attack on the RMI during the period in which the separate Military 

Use and Operating Rights agreement is in effect will result in the 

U.S. taking action to meet the danger to the U.S. and the RMI. 

Sec. 354(c)—Even if this security title should terminate, the RMI 

shall refrain from acts which the U.S. determines to be incompatible with its authority and responsibility for security and defense 

matters relating to the RMI and FSM (i.e., the ‘‘defense veto’’ continues). 

106

TITLE FOUR—GENERAL PROVISIONS

Article I—Approval and Effective Date 

Sec. 411—The amended Compact shall come into effect upon mutual agreement between the U.S. and the RMI after approval by 

their respective governments. 

Article II—Conference and Dispute Resolution 

Sec. 421—Both governments shall confer promptly upon the request of the other on Compact-related matters. 

Sec. 422—If, after conferring, one government determines that 

there is a dispute and notifies the other in writing, both governments shall make a good faith effort to resolve it between themselves. 

Sec. 423—If the governments cannot resolve a dispute within 90 

days of the written notice, either party may refer it to arbitration 

according to Sec. 424. 

Sec. 424—Such disputes will be referred to a binding Arbitration 

Board comprised of one Chairman (jointly selected by the parties) 

and two other members (one each selected by the U.S. and RMI). 

Unless otherwise provided, the Board shall have jurisdiction over 

disputes arising exclusively under the Compact and related agreements. The Board shall conduct its proceedings as it deems appropriate and reach its decision by majority vote, preferably within 30 

days after the conclusion of arguments. Except as otherwise decided by the board, the U.S. and the RMI shall split the costs of 

the arbitration. 

Article III—Amendment 

Sec. 431—The amended Compact may be further amended by 

mutual agreement of the parties, according to their respective constitutional processes. 

Article IV—Termination 

Sec. 441—The amended Compact may be terminated by mutual 

agreement of the parties, in which case Sec. 451 will apply. 

Sec. 442—The amended Compact may be terminated by the U.S., 

in which case Sec. 452 will apply. Such termination shall be effective not earlier than 6 months following delivery of the notice of 

termination. 

Sec. 443—The amended Compact may be terminated by the RMI 

if the RMI people vote for termination in a plebiscite, or by some 

other mutually agreed process, in which case Sec. 453 will apply. 

Such termination shall be effective not earlier than 3 months following notice to the U.S. of the plebiscite vote for termination. 

Article V—Survivability 

Sec. 451 (After mutual termination, per Sec. 441) 

Sec. 451(a)—Should the parties mutually terminate the Compact, U.S. economic and other assistance to the RMI shall continue only by mutual agreement. 

Sec. 451(b)—In the event of mutual termination prior to the 

20th anniversary of the amended Compact, the U.S. will continue to make its contributions to the RMI Trust Fund so long 

107

as the U.S. continues to enjoy the right of strategic denial and 

the defense veto (under Sec. 354(c) and the separate mutual security agreement). 

Sec. 451(c)—In the event of mutual termination after the 

20th anniversary of the amended Compact, the RMI will be entitled to receive proceeds from its Trust Fund as described in 

Sec. 215 and the Trust Fund Agreement. 

Sec. 452 (After U.S. termination, per Sec. 442) 

Sec. 452(a)—Describes the Compact provisions that survive 

if the U.S. terminates the amended Compact before its 20th 

anniversary (including certain provisions regarding: environmental protection, grant audits and fund misuse investigations, security and defense relations, and dispute resolution). 

Those provisions remain in effect until the 20th anniversary, 

and thereafter as mutually agreed. 

Sec. 452(b)—If the U.S. terminates the amended Compact 

before its 20th anniversary, economic and other assistance will 

continue only by mutual agreement, except that the U.S. will 

continue to make its contributions to the RMI Trust Fund so 

long as the U.S. continues to enjoy the right of strategic denial 

and the defense veto (under Sec. 354(c) and the separate mutual security agreement). 

Sec. 452(c)—If the U.S. terminates the amended Compact 

after its 20th anniversary, the RMI will be entitled to receive 

proceeds from its Trust Fund as described in Sec. 215 and the 

Trust Fund Agreement. 

Sec. 453 (After RMI termination, per Sec. 443) 

Sec. 453(a)—Describes the Compact provisions that survive 

if the RMI terminates the amended Compact before its 20th 

anniversary (including certain provisions regarding: environmental protection, grant audits and fund misuse investigations, security and defense relations, and dispute resolution). 

Those provisions remain in effect until the 20th anniversary, 

and thereafter as mutually agreed. 

Sec. 453(b)—In the event of RMI termination, there shall be 

prompt consultations between the countries regarding their future relationship to determine the level of future U.S. assistance, if any, other than what is provided in subsections (c) and 

(d) of this section. 

Sec. 453(c)—If the RMI terminates the amended Compact 

before its 20th anniversary, the U.S. will continue to make its 

contributions to the RMI Trust Fund so long as the U.S. continues to enjoy the right of strategic denial and the defense 

veto (under Sec. 354(c) and the separate mutual security agreement). 

Sec. 453(d)—If the RMI terminates the amended Compact 

after its 20th anniversary, the RMI will be entitled to receive 

proceeds from its Trust Fund as described in Sec. 215 and the 

Trust Fund Agreement. 

Sec. 454—Notwithstanding any other provision of the amended 

Compact: (1) the U.S. reaffirms its interest in promoting the economic advancement of the RMI; and (2) the separate Military Use 

and Operating Rights Agreement and Status of Forces Agreement 

shall remain in effect in accordance with their terms. 

108

Article VI—Definition of Terms 

Sec. 461—Sets forth definitions for a number of terms used in 

the amended Compact. 

Sec. 462(a)—Lists the separate agreements that will remain in 

effect under the amended Compact, including: (1) the trilateral 

agreement on transfer of Trust Territory property; (2) the Friendship, Cooperation, and Mutual Security Agreement; and (3) the 

Maritime Sovereignty and Jurisdiction Agreement. 

Sec. 462(b)—Lists the separate agreements that will go into effect under the amended Compact, including: (1) the Federal Programs and Services Agreement; (2) the Extradition, Mutual Assistance in Law Enforcement, and Penal Sanctions Agreement; (3) the 

Labor Recruitment Agreement (implementing Sec. 175(b)); (4) the 

Fiscal Procedures Agreement; (5) the Trust Fund Agreement; (6) 

the Military Use and Operating Rights Agreement; and (7) the Status of Forces Agreement. 

Sec. 463—Clarifies that certain references in the amended Compact to various U.S. laws constitutes the incorporation of the applicable language of those laws into the amended Compact. 

Article VII—Concluding Provisions 

Sec. 471—Both the U.S. and the RMI shall take all necessary 

steps to ensure the conformity of their respective laws and regulations with the provisions of the amended Compact. 

Sec. 472—The amended Compact may be accepted by the U.S. 

and the RMI by signature or otherwise. 

NEW ADVISORY COMMITTEES

Section 105(b)(6) of H.J. Res. 63 provides that ‘‘The President is 

hereby authorized to appoint an Interagency Group on Freely Associated States’ Affairs to provide policy guidance and recommendations on implementation of the U.S.–FSM Compact and the U.S.–

RMI Compact to Federal departments and agencies.’’

CONGRESSIONAL ACCOUNTABILITY ACT

H.J. Res. 63 does not apply to the legislative branch. 

FEDERAL MANDATES

According to the analysis prepared by the Congressional Budget 

Office, based on the best information available at this time, ‘‘H.J. 

Res. 63 contains intergovernmental mandates as defined in UMRA 

[Unfunded Mandates Reform Act] because it would explicitly prohibit states from taxing revenue generated by the trust fund established in the bill and from treating the fund as anything other than 

a nonprofit corporation. The costs of complying with these prohibitions would total no more than $2 million over the 2004–2008 period, falling significantly below the threshold established in UMRA 

($59 million in 2003, adjusted for inflation).’’

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

109

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman):

SECTION 605 OF THE TREASURY AND GENERAL 

GOVERNMENT APPROPRIATIONS ACT, 2002

(Public Law 107–67)

SEC. 605. Unless otherwise specified during the current fiscal 

year, no part of any appropriation contained in this or any other 

Act shall be used to pay the compensation of any officer or employee of the Government of the United States (including any agency the majority of the stock of which is owned by the Government 

of the United States) whose post of duty is in the continental 

United States unless such person: (1) is a citizen of the United 

States; (2) is a person in the service of the United States on the 

date of the enactment of this Act who, being eligible for citizenship, 

has filed a declaration of intention to become a citizen of the 

United States prior to such date and is actually residing in the 

United States; (3) is a person who owes allegiance to the United 

States; (4) is an alien from Cuba, Poland, South Vietnam, the countries of the former Soviet Union, or the Baltic countries lawfully 

admitted to the United States for permanent residence; (5) is a 

South Vietnamese, Cambodian, or Laotian refugee paroled in the 

United States after January 1, 1975; or (6) is a national of the People’s Republic of China who qualifies for adjustment of status pursuant to the Chinese Student Protection Act of 1992: Provided, 

That for the purpose of this section, an affidavit signed by any such 

person shall be considered prima facie evidence that the requirements of this section with respect to his or her status have been 

complied with: Provided further, That any person making a false 

affidavit shall be guilty of a felony, and, upon conviction, shall be 

fined no more than $4,000 or imprisoned for not more than 1 year, 

or both: Provided further, That the above penal clause shall be in 

addition to, and not in substitution for, any other provisions of existing law: Provided further, That any payment made to any officer 

or employee contrary to the provisions of this section shall be recoverable in action by the Federal Government. This section shall 

not apply to citizens of Ireland, Israel, øor the Republic of the Philippines,¿ the Republic of the Philippines, the Federated States of 

Micronesia, the Republic of the Marshall Islands, or the Republic 

of Palau, or to nationals of those countries allied with the United 

States in a current defense effort, or to international broadcasters 

employed by the United States Information Agency, or to temporary employment of translators, or to temporary employment in 

the field service (not to exceed 60 days) as a result of emergencies. 

(110)

ADDITIONAL VIEWS OF REPRESENTATIVE NICK SMITH

Congress is aware that for numerous years Chuuk State of the 

Federated States of Micronesia has been delinquent in satisfying 

various judgment debts raised against it. In the 106th Congress, 

language was included in the report accompanying the Interior Appropriations bill that advocated withholding all funds appropriated 

for the FSM unless Chuuk fully complied with judgments against 

it by FSM courts. It seems that Chuuk and the FSM still have 

progress to make in addressing these matters. 

As one example, my constituent, Mr. Danny Barrett of Whitmore 

Lake, Michigan, obtained a judgment from the Supreme Court of 

the Federated States of Micronesia for contract benefits owed him 

by the State of Chuuk. This judgment was issued in 1993. In 2001, 

the Acting Director of the U.S. Office of Insular Affairs urged the 

State of Chuuk’s governor to make payments as dictated by the Supreme Court Finding, but the issue has still not been resolved. 

The loss of this money is significant to my constituent, but even 

more importantly, its loss discourages other American citizens and 

investors from doing business with states of the FSM. The failure 

of Chuuk to live up to both its contractual obligations and even the 

judgments of its own Supreme Court could raise fundamental questions about rule of law in the federation and cast doubt on prospects for economic investment. 

The Embassy of the Federated States of Micronesia has recently 

committed to ensuring that this issue is rectified. It is my view 

that doing so will reflect well on the FSM and only help to 

strengthen American business and government confidence in the 

FSM’s legal institutions and commitment to the rule of law. Of 

course, a failure to appreciate the importance of these issues would 

have the opposite effect and possibly force Congress to once again 

question the prudence of appropriating money to institutions hostile to American citizens.

NICK SMITH OF MICHIGAN.

Æ